IMPACT REPORT 2016

RSPO

IMPACT REPORT 2016

Cover Photos Credit: DAABON & RSPO/Jonathan Perugia

CONTENTS
02
WELCOME BY RSPOCHIEF EXECUTIVE OFFICER
Impact Report
Presented By Darrel Webber
RSPO Chief Executive Officer

08
The Roundtable on Sustainable Palm Oil

11
RSPO Membership 201614
Certified Sustainable Palm Oil

19
Measuring Our Impact

23
Impact for People

33
Impact on Our Planet

04
Impact Report 2016 Highlights

06
WHY SUSTAINABLE
PALM OIL?

41
Impact on Profits & RSPO Outreach

58
Base data and notes

62
Glossary

65
References

Photo credit: RSPO & Jonathan Perugia

ROUNDTABLE ON SUSTAINABLE PALM OIL

Photo credit: RSPO & Jonathan Perugia

WELCOME BY RSPO CHIEF EXECUTIVE OFFICER

Impact Report
Presented by Darrel Webber
RSPO Chief Executive Officer

Dear RSPO Stakeholders,
Welcome to the 2016 RSPO Impact Report. For the third year now weare seeking to provide you an insight and an overview into the work
being undertaken to ensure that palm oil is produced sustainably andbecomes the norm in global supply chains.

2

RSPO IMPACT REPORT 2016

WELCOME BY RSPO CHIEF EXECUTIVE OFFICER

Since our last report, I am proud to see the progress we have made. In
particular, I believe we are gaining ground and making our voice heard
in international and sub-national policy forums, and our input andexperience is welcomed to the table in global governance discussions.
Our most important priority in the sustainable palm oil sector is
to continue to help shape government and global policy and shapethinking around environmental protection and sustainable supply
chains.

The second area which we need to work on is labour and children’s
rights. It is becoming clearer that much work needs to be done
to address two of the most horrendous human rights violations –modern-day slavery and child labour in the palm oil supply chain. We
cannot fail to adequately address these and ensure they are outlawed
from our standard.

We have also made tremendous headway in areas which are criticalfor our credibility: we have significantly improved on the monitoringof certification body and audit quality, driving the highest standards inthird-party verification. We have also made vast improvements of ourgrievance mechanisms through the revamp of our complaints system.
Through greater independence of the Complaints Panel and more
independent capacity, we have succeeded in enhancing the speed andquality of grievance handling.
Despite these major milestones, I am still concerned with some of thedevelopments of the past year. Most notably, we are still wrestling
uncomfortably with the legal issues surrounding concession maps.
This is a crucial piece in our impact monitoring efforts, as well as ourability to provide assurance on the integrity and transparency of ourmembers. We understand that this is a contentious issue and thattransparency in this area will soon become a new norm. Just to place
this issue in context, most countries around the world, have the ability
to make such information available, but choose not to.

We will therefore continue to pushforward through ongoing engagementwith relevant government bodies andauthorities to resolve this issue.
In the coming two years, a major focus for us will be to revise thePrinciples & Criteria, ensuring they remain relevant and are informedby the latest scientific thinking and stakeholder expectations. We willneed to strengthen many areas, but I believe the areas requiring themost attention is our approach to deforestation – in particular to ensurethat we incorporate the outcome of the HCS convergence process which
has the support of much of the global palm oil industry. We also needto start tackling the difficult questions around High Forest Nations
and the balance between social development and environmental
protection – I don’t think there will be any easy answers and we areunlikely to resolve this Gordian knot, but we have to be willing to start
the conversation.

Photo credit: RSPO & Jonathan Perugia

Finally, a major task for the P&C review will be to rethink the formatof the standard. We need to ensure that we provide for bettermeasurement of impact, ensuring that we are able to review our actual
effect of RSPO certification. We want to move away from anecdotal
evidence and motherhood statement, and increasingly be able todemonstrate real impact at a macro-level on the plight of workers,
forest protection, smallholder benefits and the many other positive
aspects which we know is a result of certification, as well as giving us
a tool to address areas where we need to make changes.
I do look forward to these next steps, and to working with our members
and many external partners on our journey. I’d like to thank the RSPO
team, as well as the hundreds, if not thousands, of people from allover the world who continue to put great efforts into making the RSPO
stronger and more credible year-on-year.
Thank you,DATUK DARREL WEBBERRSPO IMPACT REPORT 2016

3

IMPACT REPORT 2016 HIGHLIGHTSThe Roundtable on Sustainable Palm Oil (RSPO) is a multi-stakeholder not-for-profit
organisation that works to advance the production and use of sustainable oil palm products.
We develop and implement global standards for sustainable palm oil through open dialogue
and cooperation with every link in the supply chain. RSPO members represent the seven key
sectors of the industry: oil palm growers, palm oil processors and traders, consumer goods
manufacturers, retailers, banks and investors, environmental conservation NGOs and social
development NGOs.
Together we pursue a vision:transforming the market to make sustainable palm oil the norm.

Photo credit: Hap Seng Plantations Holdings Berhad

4

RSPO IMPACT REPORT 2016

IMPACT REPORT 2016 HIGHLIGHTS

We have 2,941 registered members in 85
countries – an increase of 29% since 2015.
Read more about RSPO membership on
page 11.

Out of the 63 complaints cases since 2009,41 have either been closed or are closed formonitoring. For more information on how the
RSPO is addressing complaints, see page 29.

Over 2.83 million hectares have beencertified across 14 producer countries. For afull update on certified area, see page 16.

We have certified 1,692 independent
smallholders in the last reporting period,
making a total of 2,496. See how we support
them to access markets and move towards
sustainable production on page 41.

At least 40 RSPO growers have phased out
paraquat, and at least 33 also have a policy
banning, or have already phased out, WHOcategory 1a and 1b pesticides. See page 28.

Note to data:
Unless otherwise specified, all figures and results presented
in this report are based on RSPO’s official reporting period(1 July 2015 – 30 June 2016). For further notes on the data
see page 58.

RSPO IMPACT REPORT 2016

5

WHY SUSTAINABLE PALM OIL?

That irresponsible oil palm
cultivation has a negativeenvironmental and social impact isbeyond question.

Why is palm oil so popular?
•

•
•
•

Yet 60 million tonnes of palm oil were consumed in 2015 and demandis predicted to reach 240 million tonnes by 2050 in the race to feed
the growing global population. Some campaigners call for a ban on
palm oil, others for the cultivation of alternative crops. However, suchmeasures are likely to create equal or even greater problems for theenvironment and local communities.
To understand the RSPO’s approach, it is useful to review the reasons why
palm oil is so widely used, why it is so hard to replace and why promoting
sustainable palm oil may be a better strategy in the long term.

6

RSPO IMPACT REPORT 2016

Versatility: Palm oil has a high melting point and stays semisolid at room temperature, making it ideal for a wide range ofuses, including baking, spreads and frying.
Taste and texture: Smooth, creamy and odourless, palm oilsuits many recipes particularly baked goods.
Preservative effect: Palm oil has a natural preservative effectthat extends product shelf life.
Cheap: Oil palm yields 4–10 times more oil per hectare thanother crops, making palm oil the least expensive vegetable oilin the world.

Why is it difficult to ban or replace?
••

Consumer demand: If palm oil is banned in some markets,
producers can simply sell it to markets where environmental
sustainability and community rights are not priorities.
Environmental degradation: Oil palm requires less energy
input, fertiliser and pesticides than other crops, so switchingWHY SUSTAINABLE PALM OIL?

••

to an alternative (e.g. sunflower, soybean or rapeseed) could
result in more deforestation, a higher carbon footprint andincreased pesticide use.
Poverty reduction: Palm oil cultivation has played an importantrole in reducing poverty in producing countries. Termination
would impact millions of farmers and their families.
Consumer and manufacturer preference: Replacing palm oil
as an ingredient is not always feasible because other oils do notgive products the same texture and taste.

Palm oil can only be sustainable if it:

Fullfills Increasing
Global Food Demand

Supports Affordable
Food Prices

Supports Poverty
Reduction

Safeguards Social
Interests, Communities
and Workers

Why is sustainable palm oil a better solution?
Sustainable palm oil represents an alternative path for the industry.
The RSPO has developed a set of environmental and social criteria thatcompanies must comply with in order to produce Certified Sustainable
Palm Oil (CSPO). Properly applied, these criteria help to minimise thenegative impact of oil palm cultivation on the environment and local
communities. They also help to realise potential benefits in terms ofconservation, poverty reduction, protecting indigenous communities,
ensuring fair labour practices and, ultimately, empowering consumers
to make informed choices.

Protects the Environment andWildlife

RSPO IMPACT REPORT 20167

THE ROUNDTABLE ON SUSTAINABLE PALM OIL
The RSPO seeks to advance the production, procurement, finance anduse of sustainable palm oil products. We develop, implement, verify
and periodically review credible global standards for the entire supply
chain and we actively monitor the economic, environmental and social
impacts of the uptake of sustainable palm oil in the market. Our
activities engage stakeholders throughout the supply chain, including
governments and consumers.

The RSPO began as an informal cooperation between several
multinational companies and the WWF. An Organising Committee
was created in January 2003 to coordinate the inaugural Roundtable
meeting in Kuala Lumpur, and to make preparations for the formal
establishment of the RSPO. The RSPO was legally established on
8 April 2004 under Article 60 of the Swiss Civil Code.

RSPO ANNUAL ROUNDTABLE &EUROPEAN ROUNDTABLE
Now in its thirteenth year, the RSPO Annual Roundtable
meeting is our flagship event. Held over three days, it gathers
nearly 1,000 delegates and observers and provides a unique
opportunity for all stakeholders in the supply chain to meetand debate evolving issues regarding sustainable palm oil andits production. In November 2015, 834 delegates attended RT13
hosted in Kuala Lumpur, Malaysia. RT14 was recently held in
Bangkok, Thailand in November 2016.
The fourth annual RSPO European Roundtable was heldin June 2016 in Milan, Italy. Inaugurated in 2013, theEuropean Roundtables enable the RSPO to engage European
stakeholders who are not able to attend the Annual Roundtable
held in Southeast Asia.

Photo credit: RSPO & Jonathan Perugia

8

RSPO IMPACT REPORT 2016

Photo credit: RSPO & Jonathan Perugia

THE ROUNDTABLE ON SUSTAINABLE PALM OILRSPO Governance & Management

AFFILIATE MEMBERS

ORDINARY MEMBERS

SUPPLY CHAIN ASSOCIATES

GENERAL ASSEMBLY (GA)BOARD OF GOVERNORSRSPO CHIEF EXECUTIVE OFFICER

STANDING COMMITTEE
Trade & Traceability, Communications & Claims, Standards & Certifications, Finance

WORKING GROUPSTASK FORCESThe RSPO is governed by it statutes and bylaws. Our members are subject to antitrust guidelines that prevent breaches of antitrust law, as wellas to the competition laws of countries in which members operate. We have also adopted a Code of Conduct to which all members are required toadhere. The Code defines how we expect members to behave towards each other: for instance, that they must seek to resolve grievances directlywith each other and must explicitly support the RSPO and its objectives.
Board of Governors

BOARD OF GOVERNORS AND REPRESENTATIVE SEATSNUMBEROF SEATS

4

NUMBER2

OF SEATSOIL PALM GROWERS
One representative each from Malaysia,
Indonesia, Smallholders and "Rest of theWorld".
Palm oil processors and/or traders

A 16-member Board of Governors representing each of the sevenmembership categories provides ultimate guidance for the RSPO.
Board members are elected for a two-year term. Members of goodstanding may nominate themselves to represent their sector on the
Board. Ordinary members may only vote for the representative intheir sector.
Secretariat

Consumer goods manufacturers
Retailers
Banks and investors
Environmental and nature conservation NGOs
Social/development NGOs

The day-to-day management of the RSPO is undertaken by the
Secretariat, which is headquartered in Kuala Lumpur, Malaysia, andhas offices in Indonesia (Jakarta), United Kingdom (London) andChina (Beijing). The Secretariat also works with representatives in the
Netherlands, India, Latin America, Thailand and the USA.
The Chief Executive Officer (CEO) leads the Secretariat and is
responsible for implementing the strategic business plans of the
RSPO. The CEO manages a team of staff that administers membershipservices and provides administrative and project support to working
groups and task forces. The Secretariat also conducts outreachto members and stakeholders, coordinates Board meetings andRoundtable sessions, and organises the annual General Assemblies.

RSPO IMPACT REPORT 20169

THE ROUNDTABLE ON SUSTAINABLE PALM OIL

Each working group comprises of representatives from all ordinary
membership categories. Membership of working groups and task
forces is voluntary and open to members with an interest in the subject
matter. The Co-Chairs of each working group are elected by the groupmembers. There are currently four working groups and one task force.

Photo credit: RSPO & Jonathan Perugia

General Assembly
The General Assembly is the annual general meeting of members. It
provides transparency on the administrative and financial activitiesof the RSPO and sets out the working agenda for the coming year.
Members may use the General Assembly as a forum to propose anddeliberate resolutions on the governance and position of the RSPO.
Resolutions that are passed are subsequently enacted as part of the
RSPO programme in the following year.
Standing Committees
Four Standing Committees oversee the RSPO’s overall operations. Eachis composed of RSPO members and led by a Chair.
The Standards and Certification Standing Committee utilises
stakeholder expertise and research to develop definitions andcriteria for the sustainable production of palm oil. It also develops
the indicators used to measure these criteria, and is responsible fororganising the mechanism that reviews and records the production of
RSPO-defined sustainable palm oil.
The Trade and Traceability Standing Committee develops solutions
for trading sustainable palm oil in various markets. It engages
with expertise to set up computerised traceability systems to track
movement of sustainable palm oil through existing commodity chains.
The committee also develops safeguards that ensure RSPO certified
palm oil is not diluted with unsustainable palm oil.
The Communications and Claims Standing Committee promotes theuse of RSPO certified palm oil. It also draws up and monitors claims
made by RSPO members about the use of CSPO.

10

WORKINGGROUPS
Smallholders Working Group
Emission Reduction Working Group
Biodiversity and High Conservation Values
Working Group
Human Rights Working GroupTASKFORCES
FFB Legality & Traceability

What makes the RSPO unique?
CONSENSUS AND SUSTAINED OBJECTION
Decisions taken by the Board of Governors, working groups and task forces
are consensus-based and free from sustained objection. Members cantake a position of sustained objection allowing for further debate before
a consensus-based resolution is reached.
ANTI-FLAGSHIP CLAUSE
The anti-flagship clause is unique to the RSPO. It prevents a company fromcertifying only its best performing plantation. Members must certify allunits in accordance with a time-bound plan.
ANNUAL COMMUNICATION OF PROGRESS (ACOP)The Finance Standing Committee oversees the financial
responsibilities of the RSPO.

Ordinary and associate members are required to submit an ACOP. This
enables the RSPO to gauge the commitment of its members and the paceof progress towards making sustainable palm oil the norm–through thedisclosure of their time-bound plan.

Working Groups and Task Forces

ON-GOING UPGRADING OF STANDARDSWorking groups conduct long-term projects within particular focus
areas. Task forces are established to deliver specific outputs against
set timelines. The Dispute Settlement Facilities Advisory Group andthe Complaints Panel guide the resolution of complaint cases.

The RSPO Principles and Criteria (P&C) and the RSPO Supply Chain
Certification are reviewed and undergo public consultation every five
years to ensure the standards remain robust. Four new criteria and 40 new
indicators were added to the RSPO P&C in April 2013. The next P&C review
is scheduled for 2017.

RSPO IMPACT REPORT 2016

RSPO MEMBERSHIP 2016RSPO membership has continued to increase and diversify in the current reporting period.
The highlights as at 30 June 2016 are:

2,941

47%

members in 85 countries,
659 more (+29%) than in 2015

are ordinary members and 53%
are affiliate or supply chain
associate members

16%

155

increase in grower membership since
the previous reporting period in 2015of the 1,373 ordinary members
are growers

80%

41%

+40%

of ordinary members
are manufacturers andprocessors and/or traders

increase in supply chain
associate members
since the last reporting
period in 2015

membership increases in
USA (45%), Australia (43%)
and Italy (40%) since 2015

RSPO IMPACT REPORT 2016

11

RSPO MEMBERSHIP 2016

1,373
ORDINARY
MEMBERS110
AFFILIATE
MEMBERS

1,458
SUPPLY CHAIN
ASSOCIATES

Note to data:

12

represent the seven key links in the palm oil supply chain: oil palm growers, processors
and traders, manufacturers of consumer goods, retailers, banks and investors,
environmental and social NGOs. Companies with business across the palm oil supply
chain qualify for membership in only one sector. Only ordinary members are allowed tosubmit resolutions and vote at the annual General Assembly

are not directly involved in the palm oil supply chain, but have expressed interest in
the RSPO's objectives and activities. Membership extends to academia, research anddevelopment organisations, donors and sponsors. Affiliate members may attend theannual General Assembly as observers

procure, use or trade less than 500 MT of CSPO annually. Establishing this category has
been critical for ensuring that even small players in the complex palm oil supply chain
can be engaged in the RSPO. Supply chain associates may attend the annual General
Assembly as observers

All figures are inclusive up to 30 June 2016.

RSPO IMPACT REPORT 2016

RSPO MEMBERSHIP 2016

ORDINARY MEMBERSHIP(1,373 as at 30 June 2016)

64 13 14Banks and Investors
Consumer Goods Manufacturers

462

Environment or Nature Conservation
Organisations (NGOs)

633

Oil Palm Growers
Palm Oil Processors and/or Traders
RetailersSocial or Development Organisations (NGOs)

155

32

TOP TEN COUNTRIES OF MEMBERSHIP(Total Membership 2,941 as at 30 June 2016)

r
Oth
e

ium

Au
str
ali

106

Be
lg

ia

a

114

es

115

on
Ind

lay

sia

128

Ma

143

Ita

158

Fra
nc
e

the

rla
n

ds

191

Ne

Sta

tes

200

ed

Ge

rm

an
y

372

Un
it

Un
it

ed

Kin
gd

om

378

ly

1,036

RSPO IMPACT REPORT 201613

CERTIFIED SUSTAINABLE PALM OILRSPO PRINCIPLES & CRITERIA

Photo credit: RSPO & Jonathan Perugia

The RSPO provides a global certification systemfor certified sustainable palm oil (CSPO) and palm
kernel oil (CSPK). The certification standard is basedon the RSPO Principles & Criteria (P&C), which wedeveloped in 2005 and revised in 2013.
The P&C are composed of eight core principles for the sustainableproduction of palm oil. Each P&C has supporting guidelines andindicators that define how the principle must be met in order to achievecertification. Once certified, growers are annually audited against the
P&C to demonstrate continued compliance.
In addition to the P&C, the RSPO certification system encompasses
a rigorous supply chain certification procedure that ensures CSPO
reaches the end user.

Photo credit: RSPO & Jonathan Perugia

14

RSPO IMPACT REPORT 2016

CERTIFIED SUSTAINABLE PALM OIL

8 Principles of Sustainable Palm Oil Production
8 Principles for Growers to be RSPO Certified

1

Commitment to Transparency

2Compliance with applicable laws andregulations

3

Commitment to long-term economic andfinancial viability

4

Use of appropriate best practices by growers
and millers

5

Environmental responsibility and conservationof natural resources and biodiversity

6

Responsible consideration of employees, andof individuals and communities affected bygrowers and mills

7

Responsible development of new plantings

8

Commitment to continuous improvement in
key areas of activity

National Interpretations
The P&C are generic and combine key internationallaws and conventions. However, countries often havespecific laws and conventions relating to the same
P&C – for instance, minimum wage – as well as othercultural differences. The P&C are therefore further
adapted into National Interpretations (NIs) for use ineach individual country.
During the reporting period (1 July 2015 - 30 June 2016),
NIs were approved for Ghana, Guatemala, Honduras,
Malaysia and Papua New Guinea. In addition, NIs havebeen developed for Colombia, Indonesia, and Nigeria,
and are in the process of being finalised. Countries
without an NI follow the generic guidance in the annex
to the P&C. All RSPO members operating in countries
that have not ratified the key international conventions
or standards outlined in the annex must still comply
with the relevant parts of the P&C where reference ismade to these conventions and standards.

To obtain RSPO certification, oil palm plantations and mills
must comply with all eight core principles as set out in the
P&C. Certified growers then undergo an annual surveillance
audit and re-certification audit every five years by an accredited
certification body (CB).

RSPO IMPACT REPORT 201615

CERTIFIED SUSTAINABLE PALM OIL

Certification progress in 2016
As at 30 June 2016, plantations covering a total of 2.83 million hectares(ha) are RSPO certified globally. The total certified HCV area covers
157,115 ha, an increase of 9% from the last reporting period. The total
production area cultivated by RSPO members (including area coveredby the group certification for smallholders (SHG) has decreased by
21% since 30 June 2015 and there has been an overall 14% decrease
in total global RSPO certified area in the same timeframe.
A 45% decrease in Malaysia’s certified area is accounted for by one
membership suspension, which has been lifted as a result of corrective
action subsequent to the close of the current reporting period, and one
member's self-withdrawal from RSPO certification.1

These changes, among other factors, may have contributed to the 16%
drop in the annual production capacity of CSPO and an 18% drop in theannual production capacity of CSPK since December 2015.2
More positively, RSPO certified area in Latin America continues on an
upward trend with a dramatic 65% (101,713 ha) increase since June
2015. We also welcomed growers from Costa Rica and Honduras in2016, bringing the total number of sustainable palm oil producing
countries to 14. Ecuador, previously a minor contributor, is no longer
a CSPO producing country. Indonesia and Malaysia still account forthe major share of certified area, with a combined total of 2.3 million
ha (81%).

CERTIFIED AREA BY REGION(Total: 2,830,355 ha)

1,527,421 1,547,241
Total Certified Area as at 30 June 2015

1,364,277

Total Certified Area as at 30 June 2016

756,595

156,467

258,180

220,232 235,956
32,256 32,383

Indonesia

Malaysia

Latin America

Rest of
Asia-pacific

AfricaNote: All figures are inclusive of certified area for smallholders certified under group certification. Certified area for Malaysia excludes certified areas held bygrowers temporarily suspended or with self-withdrawn certifications at the close of the reporting period. Following the reinstatement of the suspended
member, and assuming the grower with self-withdrawn certification takes corrective action, the certified area for Malaysia is an estimated 1,498,517 ha.

1

2

16

The certified area for Malaysia is estimated at 1,498,517 ha (as at December 2015) when including the certified area of the grower whose suspension has now been lifted,
as well as the certified area of the grower with self-withdrawn certification (assuming corrective action takes place as planned).
The decrease in annual production capacity of CSPO and CSPK in 2016 is only indicative, as data is only inclusive up to 30 June 2016. Annual production capacity of CSPO
and CSPK data for 2015 is inclusive up to 31 December 2015.

RSPO IMPACT REPORT 2016

CERTIFIED SUSTAINABLE PALM OIL

FRESH FRUIT BUNCH (FFB) PRODUCED (MT)(As at 30 June 2016)

Indonesia

27,539,397

Malaysia

Papua New Guinea

Rest of the World

Note to data:

13,731,121

2,819,455

3,964,798

Figures are based on RSPO’s official reporting period (1 July 2015 - 30 June 2016). Figures are also inclusive of volume of FFB produced for all
smallholders certified under group certification.

ANNUAL PRODUCTION CAPACITY OF CSPO AND CSPK (MT)2012-2016

CSPO

12,886,070

CSPK

11,955,234

10,850,196

9,792,185
8,184,200

2,444,103

2016

Note to data:

2,996,574

2015

2,713,935

2014

2,244,312

1,896,702

2013

2012

Figures for 2012-2015 are inclusive up to 31 December of each respective year, while figures for 2016 are inclusive up to 30 June 2016. Figures arealso inclusive of annual production capacity of CSPO and CSPK of all smallholders certified under group certification.

RSPO IMPACT REPORT 201617

CERTIFIED SUSTAINABLE PALM OIL

Building
momentum in

LATIN
AMERICAThe number of certified growers in Latin America
has risen from 5 to 11 in the past two years,
while 20 additional mills have been certified.
CSPO production has increased from 270,000 MT
in January 2015 to 645,080 MT as at June 2016.
This represents 19% of the total regional output,
putting Latin America on a par with worldwide
certification levels.
Regional interest in RSPO certification continues to grow. Twocertification bodies, Naturacert and SCS Global Services, have applied
for accreditation. If they are successful, they will join Control Unionand IBD, bringing the total number of entities qualified to conduct RSPO
audits (P&C an SCC) in Latin America to four.
Opening a regional office in Bogotá, Colombia has made our presencestronger than ever. In August 2016, we co-hosted the 6th Latin
American RSPO Conference in Guatemala, where updates on RSPO
implementation were presented with a focus on NPP, P&C, PalmGHG
and HCV. The agenda included discussion panels, key speakers andworkshops with certification bodies.
Finally, 2016 also saw the establishment of a Latin American Working
Group that aims to involve regional stakeholders more actively in RSPO
decision making processes. The working group will regularly interact
with other regional groups and provide insights into the local context of
RSPO implementation in Latin America.

18

RSPO IMPACT REPORT 2016

MEASURING OUR IMPACTRSPO Impact Monitoring Framework
To ensure we stay on track to make sustainable palm oil the norm,
we vigilantly monitor the impact our work has for our members, forthe palm oil supply chain, for the communities in which our members
operate, and for the environment.
The RSPO Impacts and Evaluation Division was established in July 2013
following the restructuring of the RSPO Secretariat. The Impacts and
Evaluation Division is responsible for monitoring certification impacts
and ensuring compliance with ISEAL Alliance codes. The division alsocollects lessons learned and best practices to drive ongoing system
improvements.
The RSPO Impact Monitoring Framework is our key tool for thispurpose. It describes the intended outcomes of our activities andenables us to measure our progress. The Framework is structured tosafeguard that RSPO activities deliver value across all stakeholder
groups based on three key dimensions: environmental benefits, social
benefits and economic benefits.
The Framework is composed of progress indicators that are aligned
to RSPO standards. These are based on criteria developed andrecommended by the Committee on Sustainability Assessment(COSA), a non-profit consortium with a mission to advance useful andtransparent measurement tools to better understand, manage andaccelerate sustainability.
The indicators are generally comparable across different conditions,oriented to change over time, sufficiently specific, measurable withreasonable cost and effort, attainable and actionable.

SUSTAINABLE
PALM OIL MARKET
BY 2016

Soil and Water
Conservation

PLANETPEOPLEPROFIT

Environmental
BenefitSocialBenefits

Economic
Benefits

GHG Emission
Reduction

Biodiversity
and Forest
Protection

Yield
Improvements& BMPsRights andParticipatory
Process

Enterprise
Resilience

BetterLivelihoods

RSPO IMPACT REPORT 2016

19

MEASURING OUR IMPACTISEAL Alliance membership
The International Social and Environmental Accreditation andLabelling (ISEAL) Alliance is the global membership association
for sustainability standards. The RSPO has been an associate ISEAL
member since 2013, and we were approved as a full member in May
2015. As part of the ISEAL Alliance, RSPO certification joins a growing
number of sustainability standards that are driving positive social andenvironmental change in multiple sectors.
Our full ISEAL membership demonstrates our compliance with the
ISEAL Standard Setting Code and that we have made good progress
towards compliance with the Impacts Code and Assurance Code whichcame into force in 2010 and 2012 respectively.
Progress on Compliance with ISEAL Impacts CodeThe Impacts Code requires every ISEAL member to implement amonitoring and evaluation plan.3 This plan must include all the steps
necessary for assessing the contributions a certification system
makes in terms of social and environmental impact. The RSPO hascommissioned Universiti Putra Malaysia (UPM) to help improve its
existing monitoring and evaluation system to support this objective.

This has involved the development of a Theory of Change, a blueprint
illustrating what, how, and why our intended activities are expected toenhance the sustainable palm oil industry.
A survey on sustainability priorities was distributed to RSPO members
as part of this process to gain a better understanding of where weshould focus in order to increase sustainability in the palm oil sector.
The results set the basis for a workshop held in August this year which
aimed to secure stakeholders’ feedback on our Theory of Change,
including the intended outcomes of our activities and the respective
performance indicators we will use to measure progress.
The Impacts Code itself provides three data collection instruments formonitoring the impact of our activities (see diagram below). In addition
to the Level 1 data we collect annually, we are making progress on
Levels 2 and 3. We have commissioned in-depth studies, such as
the smallholders study by UPM (see page 45), and have completed
the first year of the Socially and Environmentally Sustainable Oil
Palm Research (SEnSOR) programme.4 This five-year independent
research project is examining the impact of RSPO certification throughfield surveys, manipulation experiments, laboratory work, computermodelling and statistical analyses.

Level 3In-depth studies

Level 2
Monitoring data froma sample of certified units

Level 1
Data from all certified units,
New Planting Procedures andAnnual Communication of Progress
Data collection instruments based on: ISEAL Code of Good Practice for Impacts Assessment

3
4

20

http://www.isealalliance.org/our-work/defining-credibility/codes-of-good-practice/impacts-code
http://www.sensorproject.net/sensor-programme-research/

RSPO IMPACT REPORT 2016

MEASURING OUR IMPACT

Measuring progress against the UN Sustainable Development Goals
The United Nations launched a set of 17 Sustainable Development Goals (SDGs) in 2015. These include ambitious targets to end poverty andhunger, ensure sustainable consumption and production, promote peaceful and inclusive societies, and address global challenges like climatechange by 2030.
Using these indicators to give an external perspective on our performance, we have identified areas where the SDGs may already be addressedby our actions and where we have opportunities to further integrate them into RSPO standards and activities. It should be noted that this is only
a top-level analysis, which we intend to follow up with a more official and comprehensive mapping at a later stage. Our 'SDG actions' and 'SDG
opportunities' are highlighted in the following sections.

Our contribution to the UN Sustainable Development Goals
Which SDGs does RSPO already support?

The RSPO supports
the SDGs

Which SDGs does RSPO have an opportunity tosupport further?

The RSPO supports
the SDGs

More information about the UN Sustainable Development Goals can be found at sustainabledevelopment.un.org/sdgs

RSPO IMPACT REPORT 2016

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MEASURING OUR IMPACT/ PERSPECTIVES

Oxfam
Novib
Johan Verburg,
Pro-Poor Value
Chains Advisor

Photo credit: RSPO & Jonathan Perugia

Oxfam is an international
confederation of 18 organisations
working together with partners
and local communities in morethan 90 countries.
Oxfam works to find practical,
innovative ways for people to lift
themselves out of poverty andthrive.

At Oxfam we believe that policies and standards
in palm oil now need to be followed by the
implementation of new best practices. The
relations between palm oil companies and hostcommunities, especially around land use andsmallholder inclusivity, are crucial. We see
participatory land use planning in particular asa solution for achieving the different dimensionsof sustainability: environmental, social andeconomic impact. From our perspective, the SDGs
most relevant for RSPO’s impact, include SDG 1(End poverty) and SDG 2 (Zero hunger). Targets inboth SDGs make reference to access to natural
resources, including ownership and control overland, especially for women and other vulnerable
groups.
Other goals instrumental to reaching SDGs 1
and 2 are SDG 8 (Economic growth), SDG 12(Responsible consumption and production), and
SDG 17 (Partnerships for the goals). A number of
RSPO members have ambitious policies relating
to no deforestation, no planting on peat and no
exploitation. But we need “yes please” scenarios

22

RSPO IMPACT REPORT 2016

to deliver on such commitments. Moreover, bestpractices need to find their way within the sector
at large, including support from commodity buyers
and investors, for the most impactful changes.
For example, certification might not be themost effective tool to achieve improvements insmallholders’ social, environmental and economic
performance.
A shift also needs to be made from the partnershipand participatory approach at the global leveltowards similar approaches and attitudes at thefield level. Local stakeholders also need to beable to sit together and engage in a roundtable,
as they are directly affected and would benefit
from sustainable development partnership.
The participatory approach is also particularly
relevant for women affected by the palm oil sector.
Outreach activities have been less successful inreaching women in the palm oil sector. This iswhere additional effort will be required, and wherea significant opportunity exists to make a positive
impact.

IMPACT FOR PEOPLE
SAFEGUARDING SOCIAL INTEREST, COMMUNITIES & WORKERS

Photo credit: RSPO & Jonathan Perugia

It is vital that theinterests of communities andworkers are understoodand protected.
The palm oil industry employs millions of people
worldwide and over 4.5 million in Indonesia andMalaysia alone. Sustainable palm oil is therefore
a significant opportunity to improve working
conditions, raise living standards and create sharedvalue for local communities.
However, violations of workers’ rights to fairpayment and safe working conditions, as well asother malpractices, continue to occur in the palm

Photo credit: RSPO & Jonathan Perugia

oil sector. Plantations have been developed without consulting local communities. In some cases
people have been forcibly displaced from their land.
The RSPO requires its members to adhere to specific principles regarding the protection of humanrights, the development of community infrastructure, improving the health, safety and labour
conditions of workers, and eliminating labour violations. Our Complaints System ensures thatcompanies are held accountable for any breach of these principles.

RSPO IMPACT REPORT 2016

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IMPACT FOR PEOPLE

Photo credit: RSPO & Jonathan Perugia

FOCUS ON:LABOUR CONDITIONSAligned to the ILO Core Labour Standards, the RSPOP&C requires certified growers to guarantee fair pay anddecent and safe working conditions for their employees.

In November 2015, at the 12th General Assembly of the RSPO, a
resolution was approved to enhance the quality, oversight andcredibility of RSPO assessments. Specific measures include thedevelopment of mandatory guidelines and the monitoring of auditors
for quality and performance. The resolution also proposes thatsanctions and suspensions are pursued against underperformers andpersistent offenders.
Human Rights Working Group

Furthermore, growers must safeguard the right to collective bargaining
and ban bonded and child labour.
Resolution on strengthening audits approved
Media stories and NGO reports in 2014 and 2015 raised concerns
about compliance with the RSPO P&C indicators on workers’ rights
in Malaysia, specifically in relation to migrant workers. The RSPO
responded by requesting Accreditation Services International (ASI)
to conduct a review of these claims with particular focus on themethodology applied by auditors.

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RSPO IMPACT REPORT 2016

The RSPO Human Rights Working Group (HRWG) was established in2014 to support the adoption of human rights criteria into the P&C(6.13). The HRWG works to preserve the rights of communities,
plantation workers, outgrowers and smallholders, as well as otherpeople who are affected by the activities of palm oil growers andmillers.
For 2016, the HRWG will focus on improving social auditing mechanisms
and practices both at P&C level and with related organisations such as
accreditation and certifying bodies. The HRWG will set the agenda for
addressing workers' rights with a number of priorities. These include
the eradication of forced and child labour, protecting the rights ofvulnerable groups such as migrant and casual workers, and thepromotion of living wages, health and safety standards and freedomof association.

IMPACT FOR PEOPLE/ PERSPECTIVES

Verité
Philip Hunter,
Programme Director

Photo credit: RSPO & Jonathan Perugia

Verité is a civil society
organisation that works aroundthe world to promote workers’
rights in global supply chainsthrough research, consulting,training, assessments and policy
advocacy. Verité’s work includes
monitoring and documenting
labour rights and issues in
the palm oil industry, andengaging with key stakeholder
groups concerned with palm oilWith increased attention in recent years on labour
conditions in the palm oil industry – from boththe media and the NGO community – we haveseen mounting pressure on companies to address
key labour risks and the worst forms of labour
violations. As the leading multi-stakeholder
initiative in sustainable palm oil, the RSPO
continues to play a critical role in creating spacefor its members to address labour risks in a more
effective way. For example, the strengthening of
the P&C in 2013 has prompted some of the leading
companies to adopt no-exploitation policies.
While there is no question that the RSPO is
willing to respond to and collaborate with its
stakeholders, it is a matter of urgency that theRoundtable continues to develop its frameworkand ensures that auditors are addressing labourrisks effectively. The Free and Fair Labor in Palm
Oil Production Principles and Implementation
Guidance,5 provides an example of guidance oninternational best practices that RSPO could
adopt within its standards. We also hope to see
more transparency and reporting in relation to thework the RSPO is doing to address labour issues.
As a final but critical point, we strongly encourage
more activities related to awareness raising andcapacity building for labour issues. These typesof initiatives would build on the important work
RSPO is already engaging in, and would certainly
be welcomed by the NGO community and otherconcerned stakeholder groups within or outside
the RSPO. Verité, with the support of the RSPO
HRWG, has taken the lead in drafting the Termsof Reference for a Task Force on Labour Standards
Compliance. The scope of work for this Task Forcewill include: focused research on labour risks
and issues, capacity building, awareness raisingand activities geared towards more sustained andmeaningful labour standards compliance.

production and palm oil supply
chains.
5

The Free and Fair Labor in Palm Oil Production Principles and Implementation Guidance was developed by a diverse allianceof international human rights and environmental organisations and was launched in March 2015. For more information:
https://www.humanityunited.org/wp-content/uploads/2015/03/PalmOilPrinciples_031215.pdf

RSPO IMPACT REPORT 2016

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IMPACT FOR PEOPLE

Engaging with labour unions in Indonesia
Since June 2015, alongside Organisasi Penguatan dan Pengembangan Usaha-usaha Kerakyatan (OPPUK), Oxfam Indonesia, FNV Mondiaal andSerikat Buruh Perkebunan Indonesia (SERBUNDO), we have hosted a series of workshops in Indonesia to kick-start a common approach to fairlabour issues – particularly freedom of association – at Indonesian oil palm plantations. Output from the workshops included recommendations
for all represented groups:•••

Labour unions and NGOs:
to socialise labour topics, facilitated by the Ministry of Manpower and Transmigration.
Governments:
to ensure legal protection covering freedom of association and collective bargaining across the supply chain.
The RSPO:
to encourage all members to safeguard freedom of association and collective bargaining.

SDG Actions
Goal 8: Decent work and economic growth
The RSPO supports
the SDGs

Promote sustained, inclusive and sustainable economic growth, full and productive
employment and decent work for all.
The P&C are aligned to the ILO Core Labour Standards and require all certified growers
to guarantee decent and safe working conditions and fair pay, ensure there is no
harassment or abuse in the workplace, safeguard the right to collective bargaining,and ban bonded and child labour.

SDG Opportunities
Goal 8: Decent work and economic growth
The RSPO supports
the SDGs

Promote sustained, inclusive and sustainable economic growth, full and productive
employment and decent work for all.
Fair labour standards must apply to all employees, including temporary and migrant
workers. The RSPO is working to strengthen social audits to cover all of the risks
associated with reliance on casual labour, and to ensure that all workers have accessto the RSPO Complaints System.

26

RSPO IMPACT REPORT 2016

MEASURING OUR IMPACT/ PERSPECTIVES

Musim
Mas
Petra Meekers,
Director of Corporate
Social Responsibility

Photo credit: RSPO & Jonathan Perugia

Musim Mas is a leading palm
oil company and RSPO producer
member. The company’s
mission is to produce palm oil
products in an economically
viable, socially responsible andenvironmentally appropriatemanner. Musim Mas is
headquartered in Singapore, andoperates globally across thepalm oil business spectrum.

For Musim Mas, continuous improvement is an
important part of the dialogue around labour
issues and the RSPO standard. In July 2016, a
generic checklist for audits based on the P&C
2013 was released, outlining how auditors cantake into account evidence based on questions
that guide the process. This checklist is importantfor standardisation, and is a useful tool thatcan create impact as it checks on complianceand verifies at the implementation level. How
efficiently and effectively the guide is utilised will
depend on the outreach and guidance provided
to Certification Bodies, and on the third party
accreditation process carried out by ASI.
RSPO’s Certification Bodies are currently
strengthening their knowledge and understandingof the labour standards, which is a positive step.
The issue is that there is not always sufficient
capacity within an audit team to undertake theprocess, and the time needed to conduct in-depth
stakeholder interviews is limited. Time spent

on site and the auditors’ experience with theprocedures are vital to impartial auditing. The
RSPO and the Certification Bodies may therefore
need to focus on improving the audit processfrom a time and experience perspective. We alsosuggest that RSPO works on a platform together
with the NGOs leading in labour issues to improve
the process.
Going forward, it is important that the audit
process involves an in-depth focus on labour
verification. The RSPO HRWG has raised several
concerns about how labour issues should be
addressed in the auditing process. The RSPO could
strengthen the link between Certification Bodies
and the HRWG to develop an improved process forauditing labour settings.

RSPO IMPACT REPORT 2016

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IMPACT FOR PEOPLE

Monitoring commitments on paraquatand WHO 1a and 1b pesticides

Paraquat policies or commitments•

Acting on stakeholder concerns about the high toxicity levels of theherbicide paraquat – currently banned in the European Union andrestricted in the USA – many RSPO growers are limiting and eliminating
its use. Some are also phasing out pesticides classified by WHO as 1a(extremely hazardous) and 1b (highly hazardous).
The RSPO P&C (4.6) states that pesticides can only be used in waysthat do not endanger health or the environment. Growers are required
to provide documentary evidence that they are reducing and/or haveeliminated their use of paraquat, WHO type 1a and 1b pesticides, andchemicals listed by the Stockholm and Rotterdam Conventions.

•

43 ordinary members across 15 countries either have a publicly
available commitment to cease paraquat use (effective
immediately or by a target date), or have indicated that they
have ceased to use or have never used paraquat.
40 of these members are oil palm growers and 3 are classified
as palm oil processors and/or traders.

Paraquat and WHO 1a & 1b pesticide policies or commitments••

35 ordinary RSPO members have a publicly available
commitment to not use WHO class 1a and 1b pesticides andparaquat (effective immediately or by a target date), or haveindicated that they have ceased to use or have never used thesesubstances.
33 of these members are oil palm growers and 2 are classified
as palm oil processors and/or traders.

Type of commitment

Photo credit: RSPO & Jonathan Perugia

To provide some indications of progress for this report, as well as
benchmark for future monitoring, we surveyed both oil palm growers
and processor and/or trader members (i.e. those managing their own
plantations) on this key commitment. To gain the broadest sample
possible, we also used the Sustainable Palm Oil Transparency Toolkit(SPOTT) website to identify other members with a publicly available
commitment on paraquat and WHO 1a and 1b pesticides, or a timebound plan for phasing out their use.
The results combine survey responses or information gathered from 51
out of a total of 617 ordinary RSPO members that are oil palm growers,
or palm oil processors and/or traders.

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RSPO IMPACT REPORT 2016

Number of companies
from sample(RSPO ordinary members)

Paraquat policy, target orphased out already8

WHO 1a & 1b policy,
target or phased out already

2

Both

35

Total

45

The full SPOTT scorecard can be accessed atsustainablepalmoil.org/companies/#scores

IMPACT FOR PEOPLE

FOCUS ON:
SOCIAL ACCOUNTABILITY AND ADDRESSINGCOMPLAINTS AND GRIEVANCESThe RSPO Complaints Panel was set up in 2009 to address complaints
made against RSPO members. The RSPO Complaints Systemguarantees the impartial and transparent resolution of alleged
breaches, and that the companies involved are held to account for
their actions. Infractions may relate to RSPO statutes and bylaws,
motions approved by the General Assembly, or any other approved
articles, including the P&C, the certification system and the RSPO
Code of Conduct.
Dedicated Dispute Settlement Facility (DSF)
The RSPO has implemented a dedicated support mechanism formembers involved in land dispute cases. The Dispute Settlement
Facility (DSF) is an in-house mediation service that facilitates thesharing of information, contacts, know-how and experiences relevant
to palm oil production dispute cases (where at least one party is an
RSPO member). The DSF also supports and facilitates communities
and other stakeholders to use mediation as an effective means toresolve disputes.
Addressing complaints and member accountability in 2016
As at 30 June 2016, 17 complaints were recorded as either underreview or pending an action plan. Three new cases have been recorded
in 2016, and two cases have been closed. Of the 63 cases handled by
the Complaints Panel since 2009, 41 have either been closed or areclosed for monitoring. The average time to close a complaint fell from
685 days in 2015 to 312 days in 2016.6
The RSPO expects all its members to live up to their commitments
and will take appropriate action against any who do not comply withmandatory requirements.

COMPLAINTS RECEIVED AND COMPLAINTS CLOSED2009 - 2016

Complaints Received
Complaints Closed/ Closed for monitoring

18
15
13

13
11

10
7
5

4

3
0
2009
Note to data:

6

1
2010

2011

3

2

1
2012

2013

2014

2015

2
2016

Figures for 2009-2015 are representative of full calendar year (1 January - 31 December). Figures for 2016 are inclusive up to 30 June, 2016.

Number of days for 2015 is representative of full calendar year data, and number of days for 2016 is inclusive up until 30 June, 2016.

RSPO IMPACT REPORT 2016

29

IMPACT FOR PEOPLECOMPLAINTS BY COUNTRY(As at 30 June 2016)

35 35

12

a
Ric
sta

n

Pe
ru

1

Co

l
Br
azi

roo

bia
Co

1

me

1

Ca

1

lum

ce
Fra
n

2

Pa
p

ua

Ne
w

Gu

ine

eri
Lib

3

a

3

a

sia
lay
Ma

Ind

on

es

ia

4

COMPLAINTS BY CATEGORY

New Independent Appeals Mechanism & Integrated Complaints
System Procedures in consultation(As at 30 June 2016)

Complaint category

No

Free Prior Informed Consent

25

Issues related to High Conservation Values

15

Breach of RSPO Code of Conduct

3

Credibility of Certification Body

3

Human rights violations

4

New Planting Procedure non-compliance3

Other (e.g burning, plasma, pollution)

10

Burning1

Legality of plantation

2

Plasma schemes

3River pollution

2

RSPO policy

2

Total

30

RSPO IMPACT REPORT 201663

A review of the RSPO Complaints System was completed by Natural
Justice and the Borneo Conservancy Initiative in December 2014. A key
recommendation was for the development of an Independent Appeals
Mechanism (IAM) to replace the Board of Governors as the final
arbitrator in any appeal against decisions taken by the Complaints
Panel. This would help to minimise potential conflicts of interest in thecurrent RSPO Complaints System. An Integrated Complaints System(ICS) procedure document has been developed that will incorporate
the IAM. Both IAM and ICS procedures have undergone separate
consultations during the reporting period, and the aim is for these to
be endorsed by the Board in 2017. A final 30-day consultation was held
in November 2016.

MEASURING OUR IMPACT/ PERSPECTIVES

Link- AR
BorneoDjaya Sukma Ifantara,
Campaigner and Researcher

Photo credit: RSPO & Jonathan Perugia

Link-AR Borneo is a local humanrights and environmental nonprofit organisation located in West
Kalimantan. Established in 2009,its work includes, investigating
community land rights conflicts,
engaging in conflict resolution
between communities andcompanies, and providing
recommendations to companies on
how to work with communities.

Our experience with the RSPO Complaints Systembegan almost two years ago and has so far been
extremely positive. The system provides a channel
through which issues on the ground can becommunicated, and allows us to supply proof ofany violations that might be occurring. The RSPO
also connects us directly with the leadershipof the company against which the complaint islodged. In this way, the problem can be solved assoon as possible.
Without the RSPO Complaints System, there
would be no mechanism putting pressure on palm
oil companies and holding them to account. Filingcomplaints with local authorities, for example,
does not have much impact. Submitting complaints
through the RSPO, on the other hand, does. This isbecause companies risk certification suspension
and this motivates them to take action.

One issue we feel the RSPO should address is the
problem-solving process. The review of complaints
is primarily desk-based with either limited or
no investigation on the ground. In the past, wehave often found that the supporting evidence
provided by a company and evidence suppliedby the complainant can be contradictory, which
is why the RSPO should speak to communities
directly and cross-check all evidence in the field.
We would further recommend that the RSPO
takes on more of a mediation role, ensures that
the Complaints Panel is completely neutral, andcontinues monitoring for a specific time period
after complaints are resolved. If we do not monitor,
violations will continue to take place.

RSPO IMPACT REPORT 2016

31

IMPACT FOR PEOPLE

Photo credit: RSPO & Jonathan Perugia

Lessons & challenges
Improving social auditing mechanisms
Social auditing is vital for finding and tackling the worst forms oflabour violation, especially given the palm oil industry's reliance on
temporary and migrant workers who are vulnerable to below-minimum
wages, passport removal, physical abuse and unsafe working
conditions. Having reviewed and identified gaps in the application ofexisting audit methodologies, the RSPO will now work directly withauditors to improve quality and performance, ensuring the P&C areproperly implemented and that every violation is identified, reported
and addressed.
Ground truthing and increasing access to the complaints system
The RSPO Complaints Procedure has a built-in investigative component
that provides for the commissioning of additional verification andinvestigation if further information is deemed necessary. However,we acknowledge that the majority of cases are currently notverified at ground level. The new ICS Procedures will expand on the
ground truthing component by including a dedicated section on theinvestigation phase, and allowing the Complaints Panel to conduct ordirect investigation into complaints. We also acknowledge our relianceon social NGOs and local partners to channel cases into the system.
Improving access will be a key focus of the RSPO Complaints Systemrevamp.

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RSPO IMPACT REPORT 2016

Photo credit: RSPO & Jonathan Perugia

IMPACT ON OUR PLANET

Photo credit: RSPO & Jonathan Perugia

Oil palm cultivation continues
to have a negative environmental impact,with deforestation remaining a leadcause for extreme concern.

7

For our purposes, deforestation is defined as the clearing of land
covered by primary forest (i.e. untouched by human activity) or
land that has contained high conservation value (HCV) areas.7
Deforestation, as well as the conversion of high carbon stock land
areas (especially peatlands) increases the risk of fire and releases
large amounts of greenhouse gases (GHGs). The development of HCV
areas also threatens rare species with extinction and impoverishes
local communities in the long term.
The RSPO is working with its members to eliminate the loss of
HCV areas and to plan development in such a way to minimise net
GHG emissions towards a goal of low carbon development. Key
developments during the current reporting period include the updateof the New Planting Procedures (NPP), endorsed by the RSPO Board
in November 2015, as well as the launch of RSPO NEXT, a voluntaryaddendum criteria to the existing P&C.

HCV areas host protected species and biodiversity (HCVs 1-3), basic ecosystem services in critical situations (HCV 4), sites and resources fundamental forsatisfying the basic necessities of local communities or indigenous peoples (HCV 5), and sites with cultural or national significance (HCV 6).
For more information, visit: https://www.hcvnetwork.org/about-hcvf/the-six-high-conservation-values

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IMPACT ON OUR PLANET

FOCUS ON:NO DEFORESTATION AND
REDUCING GHG EMISSIONSRSPO NEXT
Released in February 2016, RSPO NEXT contains a set of additional
criteria and indicators, beyond those already built into RSPO
certification, to which members must comply and have verified by anaccredited Certification Body (CB) in order to prove they work with bestpractices in key environmental and social dimensions. RSPO NEXT has
so far been received well in the market, but many stakeholders havecalled for the criteria to be included in the P&C.
In the context of deforestation, the RSPO P&C already prohibit theclearing of primary forests, HCV and extensive planting on peatlands.
RSPO NEXT requires growers to go further and commit to a strict nodeforestation policy. Furthermore, development can only take place
on mineral soils and low carbon stock areas. Low carbon stock areas
are defined as those with (above and below ground) carbon stores,that would be lost by conversion to oil palm, smaller than that which
would be sequestered within an oil palm crop and other set-aside
areas within the management unit over the period of one rotation.8
This policy extends beyond company boundaries and incorporates thelandscape approach (see page 40).

Photo credit: RSPO & Jonathan Perugia

RSPO NEXT
add-on criteria and indicators
The RSPO NEXT add-on criteria and indicators, including the eligibility andapplication framework, were developed by a working group of RSPO Board
members including growers, processors and traders, retailers and social andenvironmental NGOs. The indicators are:No Deforestation

No Use of FireNo Planting on Peat

Reduction of GHGs

Respect for
Human Rights

Transparency

Photo credit: RSPO & Jonathan Perugia

834

Encouragement for growers to establish new plantings on mineral soils, in low carbon stock areas, and cultivated areas is already included in the P&C under theguidance for criterion 7.8.2.

RSPO IMPACT REPORT 2016

MEASURING OUR IMPACT/ PERSPECTIVES

GoldenVeroleum
Liberia
David Rothschild,
Executive Director

Golden Veroleum Liberia is an oilpalm developer with a vision todevelop the Oil Palm sector in
Liberia in a sustainable manner.
GVL is one of Liberia’s largest
investors, they hold the belief thatoil palm development can andshould be carried out responsibly
and sensitively. GVL has been an
RSPO member since August 2011.

Photo credit: RSPO & Jonathan Perugia

The RSPO processes, such as the New Plantings
Proceduce (NPP), are quite rigorous. The NPP
does identify HCV forests upfront and requires
management and mitigation plans to be
developed before new plantings can proceed.
The HCV compensation process also facilitates
remediation and reforestation.
However, from our perspective, there is a lack ofconsistency in the application of the RSPO P&C
guidelines and processes. We would suggest there
are weaknesses in the actual application of the
P&C as we find there is a lack of clear definitions,operational guidelines and measurement
methodologies. We believe that monitoringmechanisms are also largely inadequate because
they currently depend mainly on audits, which may
not be comprehensive, or worse, on complaints,
some of which may be frivolous and yet consume
significant resources and time to resolve.
The fact that there are industry-driven initiatives
to address the deforestation issue – with many
RSPO members participating or driving themperhaps illustrates the deficiencies in the current
RSPO processes and activities.

As RSPO members, our hope is that RSPO can playa more active leadership role in driving the industry
to adopt best practices, such as no deforestation,andinencouraging
multi-stakeholder
engagement, as well as harmonising the different
methodologies – (e.g. GHG, HCSA and HCS+) sothat there is one clear, consistent and accepted
methodology in addressing the deforestation issue
in the industry. Such a methodology should take
into account the context of communities owning or
utilising the forest, the outcomes desired by thesecommunities and their active understanding andconsent. It could consider local legislation andperhaps local definitions of forest cover withoutcompromising core forest conservation standards.
There should also be the consideration that insome of the world’s most impoverished countries,
responsible land development and agriculture areimportant and possibly the only viable alternatives
for economic development.
Forest conservation issues and initiatives arecomplex and multidimensional, and GVL believes
that RSPO can play an important leadership rolein addressing the challenges. GVL management
trusts that the observations and suggestions
provided will be taken as constructive feedback
to the RSPO in fulfilling its important role in
improving standards in the oil palm industry.

RSPO IMPACT REPORT 2016

35

IMPACT ON OUR PLANET

Updated New Planting Procedure
Introduced in 2009, the New Planting Procedure (NPP) ensures thatall RSPO requirements are taken into account before new plantations
are developed. Under the NPP, all oil palm plantings developed
after 1 January 2010 must meet specific criteria in advance of any
land preparation or associated development. Specifically, proposeddevelopments should not include primary forest or HCV areas, should
not degrade fragile or marginal soils, and should not encroach on lands
owned by local communities.
The NPP is implemented through a set of technical assessments andstakeholder engagements, including a Free, Prior and Informed Consent(FPIC) process. After these assessments are verified by an accredited

certification body, a notification is posted on the RSPO website for a 30day public consultation, together with summaries of the assessments.
The NPP notification contains the findings of the assessment, detailsof the planned development and the management plan. The growerneeds to address all comments received during this public notification.
Furthermore, the grower may not commence any land preparation, nor
any new planting or infrastructure development, before the end of the
30-day period or prior to official approval by the RSPO.
In November 2015, the RSPO Board of Governors endorsed an updated
New Planting Procedure. NPP 2015 was effective from 1 January
2016 (with a six months grace period) and became compulsory on
1 July 2016.

KEY UPDATES IN NPP 2015:

Compiles all previous

NPP DOCUMENTS
into oneprocedural document

INCORPORATES NEW ELEMENTS
from the P&C 2013
(including P&C 7.3, 7.8)

as well as the required use of the High Conservation Value Resource Network(HCVRN) Assessor Licensing Scheme (ALS).

Provides clarification on
the new planting definition and application of

PROVIDES FURTHER CLARIFICATION,

PRINCIPLE 7.

including clearer language
surrounding guidance steps

Exempts conversions of land under livestock ranches
and agricultural crops since 1 January 2010
from verification by a certification body.

Removes application ofrequirements for on-goingplantings (plantings straddling
January 2010)

Requires independent
assessments fordevelopments covering
more than 500 ha.

A list of current NPP consultations can be accessed at rspo.org/certification/new-planting-procedures/public-consultations

36

RSPO IMPACT REPORT 2016

IMPACT ON OUR PLANET

The NPP 2015 process
1.
2.
3.
4.
5.
6.
7.

Conduct Impact Assessments (HCV assessment must be conducted through a licensed HCV assesor)
Prepare implementation plan
Secure verification from certification body
Public notification on the RSPO website (30 days)
Comments addressed and resolved by company to the satisfaction of all parties
Unresolved comments escalated to the Complaints PanelIf no comments received/outstanding, proceed with new plantings

Conduct Impact
Assessments(HCV assessment
must be conducted
through a licensed
HCV assessor)

PrepareImplementation
Plan

Secure verificationfrom certification
body

Comments
addressed
and resolved
by company
to all parties’satisfaction by thecompany

Public notificationon the RSPO
website (30 days)

If no comments
received/
outstanding,
proceed with newplanting

Unresolved
comments
escalated to theComplaints Panel

NPP Highlights

Launch of the Assessor Licensing Scheme

As at 30 June 2016, a total of 1,386,509 ha across 11 countries were
subject to NPPs. In this reporting period:•
14 NPP notifications were approved covering 40,023 ha inIndonesia, Malaysia and Papua New Guinea.
•
Under the 14 NPP notifications approved in this reporting
period, 9,849 ha has been proposed for HCV area.
•
The first NPP was received from Guatemala (691 ha), while
Cameroon has been removed from the current NPP area list.

All assessors conducting HCV assessments for the NPP must be
licensed under the HCV Resource Network. This ensures that their
methodologies follow a standardised procedure. As part of theprocess, HCV reports for NPPs must be submitted to the ALS, which
was launched in October 2014. Of the 27 HCV reports submitted in thisreporting period, 22 were related to NPP requirements.

NEW
PLANTINGNOTIFICATIONAREA BY
COUNTRY(As at 30 June 2016)

1,070,465
HA

0
HA

6,381
HA

10,719
HA

4,145
HA

7,980
HA

146,955
HA

40,380HA90,959
HA

5,594
HA

2,240
HA

691
HA

RSPO IMPACT REPORT 2016

37

MEASURING OUR IMPACT/ PERSPECTIVESWWFInternational
Adam Harrison,
Global Palm Oil Lead

Photo credit: RSPO & Jonathan Perugia

WWF is the world’s leading
conservation organisation, working in
100 countries worldwide. WWF’s work
combines research, advocacy, andbuilding partnerships across sectors
and at all levels, to protect wildlife andendangered species. Adam Harrison isWWF’s lead on palm oil, working withand putting pressure on the palm
oil value chain to fund, produce andsource the commodity sustainably andto influence government policies thatshape the wider industry. He is also thelead in WWF on institutional support to
the RSPO.

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RSPO IMPACT REPORT 2016

The RSPO has played an indispensable role inpushing the no deforestation agenda forward,
in part by mainstreaming tools, such as the HCV
assessment, which had and still has no legal
recognition in the largest palm oil producing
countries. The RSPO also pioneered a carbon
assessment approach at a time when no one wasworking in the carbon sphere within the sector.
While the various HCS initiatives are where themethods are being finalised, there is no doubt that
the RSPO has had a significant influence towards
getting no deforestation issues on the table.
The widespread adoption of no deforestation
policies is promising, but only a start. A major
challenge here relates to the industry being
largely dependent on smallholders and smallmedium sized independent companies, and a lackof control and traceability of illegal FFB sourcing.
We recognise that RSPO is making some steps
here through its FFB Legality and Traceability Task
Force, which is currently looking at how mills canoperate in different ways and start understanding
where FFB is coming from.

Other crucial elements in the move to put nodeforestation into practice is quality control ofcurrent processes required by RSPO members(e.g. HCV management), as well as consistent,
comparable third-party verification of nodeforestation commitments. We see that a big
task for the RSPO now will be to work out what
HCS means for FPIC, HCV and carbon, and how HCS
can be integrated back into the RSPO’s standards
and procedures.
The quality of debate that the industry has hadaround no deforestation and the challenges of
HCS has been much higher due to the 10 years oftrust building facilitated by the RSPO. However,engagement with government in this debate has
been limited. There is only so far that even thebest performing companies can go when trying
to function within policies that limit them. With
the jurisdictional approach, it is clear that
the RSPO is now starting to make progress on
working with legislators, regulators, and policy
makers. Expanding and strengthening these typesof engagements will determine the success ofconserving HCV and HCS areas in the long-term.

IMPACT ON OUR PLANETHCV Remediation and Compensation Procedure
HCV assessments are critical for demonstrating compliance with the
RSPO P&C and the NPP. Despite P&C 7.3 explicitly prohibiting newplantings after November 2005 in primary forest or HCV areas, casesof land being cleared without due evaluation were still coming to lightin 2014.
The RSPO takes such breaches extremely seriously, but acknowledges
that some have resulted from unfamiliarity with the P&C or theactivities of previous landowners. Rather than pursuing immediatesuspension, or excluding growers from the certification scheme, welaunched a Remediation and Compensation Procedure (RaCP). This
procedure requires producers to compensate for any land clearance
without prior HCV assessment since November 2005—for example,
by carrying out onsite or offsite remediation in partnership with thegovernment, the community or with an NGO. The compensation plan
must be proportionate to the habitat lost.

A one-year staged implementation of the RaCP was initiated in May
2014, designed to gather additional information and experiencesin order to further refine the procedures. All RSPO producers were
given until the end of July 2014 to disclose any non-compliant land
clearance, and until the end of September 2014 to submit a Land Use
Change Analysis (LUCA). The RaCP was then revised in May 2015 tostrengthen and further clarify dimensions on social liability and thesubmission of new planting Standard Operating Procedures (SOPs). All
non-compliant land clearance disclosures and LUCA are now subject
to these new requirements, which were endorsed in November 2015
following a 60-day public consultation.
The RSPO is contacting members directly to offer guidance on the
updated RaCP – including the compensation of social liabilities – andto communicate deadlines for submitting evidence that they have nooutstanding social issues and have established SOPs relevant to NPP.
As at 30 June 2016, we have 100 % full disclosure on non-compliant
land clearance from our members who own or manage plantations.
These members are now in various stages of the compensation
process.

SDG Actions
Goal 15: Life on land
The RSPO supports
the SDGs

Protect, restore and promote sustainable use of terrestrial ecosystems,
sustainably manage forests, combat desertification, and halt and reverse landdegradation and biodiversity loss.
Principle 5 of our P&C is dedicated to Environmental Responsibility and Conservationof Natural Resources and Biodiversity. It includes requirements on identification andmitigation of negative environmental impacts, enhancement of positive impacts, thepreservation of rare, threatened and endangered species, and conservation of HCVAreas.

Goal 6: Clean Water and Sanitation
The RSPO supports
the SDGs

Ensure availability and sustainable management of water and sanitation for all.
Principles 4, 5, 6 and 7 in the P&C contribute to various targets set out under SDG 6
for clean water and sanitation. For example, a water management plan is requiredby growers under principle 4, which covers: water use efficiency; wastewater
minimisation; safeguarding surface and groundwater from contamination; providing
access to adequate and clean water for workers and local communities; and ensuringthat the use and management of water by the operation does not result in adverse
impacts.

RSPO IMPACT REPORT 2016

39

IMPACT ON OUR PLANETSDG Opportunities
Goal 13: Climate action / Goal 15: Life on land
Take urgent action to combat climate change and its impacts / Protect, restore andpromote sustainable use of terrestrial ecosystems, sustainably manage forests,
combat desertification, and halt and reverse land degradation and biodiversity
loss.

The RSPO supports
the SDGs

Long-term conservation and reduction in carbon emissions can only be achieved inpartnership with governments, growers and communities. We will continue working
with all actors to ensure HCS and HCV areas are identified and mutually recognised,
and that alternative approaches that decouple socioeconomic development fromdeforestation and environmental degradation are developed.
Lessons & challenges

ambitious initiative to develop stakeholder-driven certification at astate level. This 'jurisdictional approach’ involves the developmentof regulatory processes and policy frameworks supporting palm oil
certification.

Peatland subsidence
Research by Wetlands International indicates that peatland
subsidence caused by the development and drainage of peatlands inIndonesia and Malaysia, will lead to increased and prolonged flooding
and loss of productivity in these land areas.9 This has disastrous
consequences for habitats, communities and companies. The RSPOP&C strongly discourage peatland development, specifying thatdrainability assessments must be carried out before any replanting
takes place, and that environmental degradation and GHG emissions
are monitored and reported to the RSPO. RSPO NEXT goes further,
explicitly prohibiting any planting on peat.

Haze in South East Asia
The haze in South East Asia – primarily caused by agricultural firesin Riau province in Sumatra and Kalimantan – continues to inflictextreme environmental, social and economic costs across Indonesia
and surrounding countries. One of the worst and most prolonged
periods of haze occurred in 2015 as a result of dry weather triggeredby El Niño.
The RSPO considers the environmental pollution, destruction andhealth damage caused by these fires to be deplorable. In 2014, theWorld Resources Institute developed a mapping tool that identifies
and locates fires in oil palm concessions and RSPO certified oil palm
concession areas with a high level of precision.10 Within our capacity,
we will continue to take firm action to investigate any hotspots andincidents potentially linked to RSPO members, and will demandcorrective measures whether the fires are due to systemic issues or
not.

Photo credit: RSPO & Jonathan Perugia

The need for certification at landscape level
The causes of deforestation, HCV degradation and loss of community
lands are interlinked. A meaningful response must address thesechallenges at a landscape level, where the multiple objectives ofdifferent land use types are considered, even beyond the concession
areas of oil palm plantations. At the end of 2014, the RSPO began an
9
10

40

We are also prepared to take remedial action against companies
reported to be in non-compliance to the P&C which forbids open
burning and requires that all members have standard operatingprocedures to manage fire. As the problem is widespread, and goesbeyond palm oil production, we see there is a need for collective
actions based on the contribution of all stakeholders. These actions
should include the adoption of systematic solutions and the shaping ofgovernance for the whole region.

Research on peatland subsidence carried out by Wetlands International can be accessed at https://www.wetlands.org/publications/flooding-of-lowlandpeatlands-in-southeast-asia/.
The map is accessible at www.globalforestwatch.org. It identifies land concessions granted by governments, deforestation (and reforestation), active fires andplantations that have been certified as sustainable.

RSPO IMPACT REPORT 2016

IMPACT ON PROFITS & RSPO OUTREACH
DRIVING CHANGE THROUGH THE SUPPLY CHAIN

Photo credit: RSPO & Jonathan Perugia

Sustainable palm oil isincreasingly recognised as not
only economically viable, but also
as profitable in its own right.
The RSPO celebrates the fact that more and more major players
understand the benefits and are coming on board. But to drive realchange, we need to ensure that sustainable practices and certification
are workable and profitable for players at every level of the supply
chain.
Supporting smallholders will be crucial in this respect. The RSPO
recognises that certification is big challenge for smallholders, andthat many face day-to-day challenges that make it difficult to prioritise
what may seem a complicated process with few immediate benefits.
During this reporting period, the RSPO has commenced work on aComprehensive Smallholder Strategy, and has continued working
to demonstrate that making sustainable palm oil the norm will be
profitable for everyone.

FOCUS ON:SUPPORT FOR INDEPENDENT SMALLHOLDERS
Three million smallholders and small-scale farmers earn their livingfrom palm oil. They may be small in terms of individual size, but theircollective contribution to the global supply of palm oil is important. In
2015/2016, smallholders produced 0.96 million MT of palm oil - around
9% of total production globally.
Smallholders have specific challenges that make it difficult for themto operate sustainably. Lacking access to the latest knowledge andtools used by large producers, they typically have much smaller yields
per unit of area, and this increases the likelihood that they will clear
land to improve output. Lack of expertise also limits their ability toaccess new markets.
Working with smallholders therefore presents a significant opportunity
to support the production of sustainable palm oil and reduce therisk of deforestation and environmental degradation. By facilitatingsmallholders' access to markets, and by sharing tools and knowledge
to help them increase yields and profitability, we make sustainablepalm oil a far more compelling proposition.

RSPO IMPACT REPORT 2016

41

IMPACT ON PROFITS & RSPO OUTREACH

How the RSPO works with smallholders
RSPO provides certification to match the needs of the two main
smallholder types: independent smallholders, who are self-managed
and not contractually bound to a mill, and scheme or associatedsmallholders, who are contractually bound to (and often directlysupervised by the managers of) a mill, scheme or estate. Independent
smallholders must be certified under RSPO Group Certification.
In March 2016, we launched the RSPO Management System
Requirement and Guidance for Group Certification of Fresh Fruit Bunch.
The document provides a step-by-step guide to the RSPO certification
process for any Fresh Fruit Bunch (FFB) producers not managed bya mill-with-supply-base. This includes independent, associatedsmallholders (including scheme smallholders), outgrowers and all
independent growers, regardless of the size of their plantations.
Photo credit: RSPO & Jonathan Perugia

GROUP ENTITYGROUP MANAGER

INTERNAL
CONTROLSYSTEM

SMALLHOLDERS• Provides managerial and administrative
support for the group• Monitors smallholders/ members
performance• Responsible to trade for the group• Standard Operating Procedure(SOP)• Rules & regulations• Internal audit
etc.

• Formally join the group• Agree to group rules and regulations• Comply with RSPO’ Principles andCriteria (P&C)

Figure: Group Certification Structure

42

RSPO IMPACT REPORT 2016

Assessments*

CERTIFICATION BODY
*Assesses a sample of groupmembers during each audit

IMPACT ON PROFITS & RSPO OUTREACH

Photo credit: RSPO & Jonathan Perugia

Photo credit: RSPO & Jonathan Perugia

RSPO Smallholders Support Fund

Smallholder certification highlights (as at 30 June 2016)

Certification can be a complicated exercise for smallholders. It
requires training, guidance and administration – and all of theserequire funding. The RSPO Smallholder Support Fund (RSSF) has been
established to support smallholders through the certification process
while minimising costs.

•

The RSSF is funded from 10% of income generated through the tradingof CSPO. This provides support to cover audit costs, HCV and Socialand Environmental Impact Assessments (SEIA), the development ofinternal control systems, as well as the tools and training to build
capacity and bring more high quality FFB to the market.

11,880 ha certified in total under group certification for
independent smallholders.
1,692 independent smallholders newly certified in thereporting period (1 July 2015 - 30 June 2016).
17 independent smallholder groups composed of 2,496
independent smallholders certified in Indonesia, Malaysia andThailand.
146% increase in certified independent smallholders in
Malaysia since the last reporting period (1 July 2014 - 30 June2015).
23% and 16% increases in certified independent smallholders
in Indonesia and Thailand respectively since the last reporting
period (1 July 2014 - 30 June 2015).

•
•

•

•

NUMBER OF INDEPENDENT SMALLHOLDERS UNDER GROUP CERTIFICATION
2012 - 2016

1,336
1,151

As at June 2012
As at June 2013
As at June 2014
As at June 2015

810
658

As at June 2016

658

349

350

0

0
Indonesia

72

108
Malaysia

423

423

423

142

Thailand

Note to data: Just over 2,000 smallholders from the FELDA Segamat scheme (Malaysia) were included in the 2014 Impact Report as they werecertified under the group certification scheme. However, for the sake of accuracy, we have decided to exclude these from futurereporting. All figures are based on RSPO’s official reporting period (1 July - 30 June) for each respective year.

RSPO IMPACT REPORT 2016

43

IMPACT ON PROFITS & RSPO OUTREACH

Taking action on smallholder needs

RSPO Smallholders by the Numbers(As at 30 June 2016)
Number of RSPO
Smallholders(Schemed andIndependent)

109,415

Total Smallholders
RSPO certified area

Total of RSPO
certified area globally

The RSPO's Guidance for Independent Smallholders on Managing HCV
in Established Plantations has been a key achievement in making
certification requirements actionable for small operators. The HCV
management criterion has hitherto proved particularly challenging forsmallholders.

individuals

257,649
2.83

Ha

million(Ha)

Global Volume of
RSPO certified
sustainable palm oil

10.85

Volume of RSPO CSPO
produced by
Smallholders(Schemed andIndependent)

0.96

Percentage of
Smallholders certified
sustainable palm oilover total volume
of RSPO certified
sustainable palm oil

8.83

million(MT)

million(MT)%

Developed in collaboration between the HCV Resource Network and
SHARP, a multi-stakeholder partnership that supports sustainable
smallholder development, the guidelines offer a simplified approach
to HCV management that incorporates basic but robust procedures for
identifying, managing and monitoring potentially affected HCVs.
The RSPO Comprehensive Smallholder Strategy
A resolution to develop a specific smallholder strategy was adopted atthe 2015 General Assembly. The strategy should define the role thatmills, markets, local authorities and the RSPO can play in creating an
enabling environment where smallholders can work sustainably andsupport transformation in the palm oil sector. The resolution states thatthe strategy and its action plan must be completed within one year.
The RSPO has so far established a number of structures (including
the Smallholder Working Group and Smallholder Support Fund),regulations (including group certification, verification scope as ‘mill
and supply base’, and grace periods for scheme smallholders) and otherapproaches (jurisdictional approach to certification) to support hostcommunities and smallholders.
Our next steps will be to learn more about the particular needs ofsmallholders as well as the challenges they face. This will enable us
to develop a flexible approach that can be tailored towards the diverse
needs of small operators in different regions. Complex factors suchas gender, family and community relations must also be addressed inorder to support transition and growth. In line with these ambitions, weorganised a series of workshops in Q3 and Q4 2016 where the working
group and independent experts provided input for five-year regional
action plans. Workshops were hosted in Indonesia, Honduras, Ghana andthe Netherlands.
The Comprehensive Smallholder Strategy is scheduled for finalisation
at the end of 2016. The strategy was presented to the RSPO Boardof Governors in November 2016. The subsequent action plan will
be developed following the approval of the strategy by the Board ofGovernors.

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RSPO IMPACT REPORT 2016

IMPACT ON PROFITS & RSPO OUTREACH••

Photo credit: RSPO & Jonathan Perugia

Understanding the impact of RSPO certification on livelihood &sustainability – evidence from independent smallholders in East
Malaysia
To better understand the impact of certification on smallholders'
livelihoods, the RSPO funded a 2015 study by the Institute ofAgricultural and Food Policy Studies (IKDPM). Field observations andsurveys were carried out in Bintulu (Keresa) and Sandakan (Sapi)
districts, with a total of 76 and 100 smallholders being interviewed inthese areas respectively.
Sufficient evidence was found to conclude that RSPO certification
has a positive impact on the social and economic wellbeing of
smallholders, as well as on their surrounding environment. A numberof recommendations were also made to ensure that these benefits are
sustained over the long-term.

•••

Key recommendations:••

Study findings:••

A high level of awareness: smallholders are generally aware ofcertification, and would be motivated by economic incentives(e.g. premium pricing and farm yield improvements).
Improved working relationships: in Keresa, certification

enhanced interaction between plantation companies andindependent smallholders.
A spill-over effect: non-certified smallholders emulate thebest practices adopted by their certified counterparts andbenefit from infrastructure provided by plantation companies.
A return on investment: some certified smallholders
experience higher economic returns compared to non-certified
smallholders. Mean annual household income for certified
smallholders in Keresa is almost 25% higher than that of noncertified smallholders – with bigger yields and farm size also
being relevant factors.
Environmental improvement: some certified smallholders
perceive an improvement in their surroundings postcertification (e.g. better waste management and lesspollution).
Less and safer chemical use: certified smallholders are better
trained in the use of fertilisers and pesticides, increasing
safety and reducing harmful substances in the environment.
A catalyst for social wellbeing: RSPO certification may improvesocial structures, facilities, working conditions, lifestyle andeducation, as well as cooperation among farmers.

•

Extension services are vital: beyond certification, smallholders
need continuous education and support to keep improving theirproductivity and achieve the full benefits.
Premium prices drive certifications: premium pricing of FFB
and transparency in the pricing and payment mechanism
attract more smallholders to become certified. To support this,certified mills could transfer some of the premium they receive
to certified smallholders.
Group managers are key: they need to play an active role inorganising certified smallholders, not only for certification, butalso to guide and build business decision making capacity.

SDG Actions

SDG Opportunities

The RSPO supports
the SDGs

The RSPO supports
the SDGs

Goal 2: Zero hunger

Goal 5: Gender equality

End hunger, achieve food security and improved nutrition and promotesustainable agriculture.

Achieve gender equality and empower all women and girls.

RSPO supports smallholders by providing the framework through which they
can obtain RSPO certification. Certification creates an opportunity to gain
access to markets, improves farm management, increases yields through bestpractices and can thereby raise household incomes.

Our approach to smallholders should include a strong focus on improving
livelihoods for women. This has not yet been made an explicit RSPO focus, yet
it should be integral considering the central role women play in small-scale
farming in many countries around the world.

RSPO IMPACT REPORT 2016

45

MEASURING OUR IMPACT/ PERSPECTIVES

Yayasan
SETARA
Jambi
Rukaiya Rafiq,
Director

Photo credit: RSPO & Jonathan Perugia

SETARA Jambi is a local
non-governmental organisation
launched in May 2007.
It focuses on promoting
sustainable palm oil in Jambi
and South Sumatra.

The RSPO has made a strong effort to support
smallholders,
especiallyindependent
smallholders. We recognise the RSPO’s successin developing a sustainability standard forsmallholders, and the importance and value of
the RSPO Smallholders Support Fund (RSSF).
In Indonesia, for example, the number of
RSPO certified independent smallholders has
significantly increased this past year. On theother hand, there are still many challenges tobe addressed regarding implementation of thesestandards on the ground.
From our perspective, the success of the RSPO’s
goal of making sustainable palm oil the norm
will depend on the participation of smallholders.
Tackling the issues they face and providing
solutions requires a deep understanding of thevarious contexts in which smallholders operate.

46

RSPO IMPACT REPORT 2016

The RSPO is making advances through thelaunch of new guidelines for smallholder group
certification and the release of RSPO NEXT. Whilethese are encouraging developments, we also seethat these initiatives may add more complexity,
and may not be fully applicable to independent
smallholders.
We hope to see the RSPO evaluating its
progress with smallholders and developing an
understanding of the situation in the field prior
to revising future guidelines. For example, the
RSPO could develop a work plan to engage withsmallholders on the ground regularly (ideally
every six months). Regarding the RSSF, we would
recommend that the procedure to access the fundis simplified and socialised beyond the national
level (Indonesia).

IMPACT ON PROFITS & RSPO OUTREACH

FOCUS ON:
MARKET OUTREACH AND GENERATING DEMAND
Market uptake progress
Demand for CSPO has continued to grow, with overall sales of CSPO growing by 16% to over 6 million MT as at December 2015. From 2014 to 2015
(calendar year), physical sales of CSPO increased by 13%, while sales of palm oil covered by the Book & Claim (B&C) system increased by 17%.
The proportion of CSPO sold as a percentage of CSPO produced has decreased slightly in the first half of 2016, but is still close to the halfway markat 45.7%, compared to just over 50% in the last reporting period.

ANNUAL SALES OF CSPO (MT)(2008 - 2015)

6,182,694

CSPO Sales through B&C

5,349,666

CSPO Sales through IP, SG, MB

4,513,273
1,551,017

3,479,415
984,138

2,490,526

4,452
4,452
0
2008
Note to data:

343,857
98,044
245,813
2009

831,010

1,281,134

3,426,790

2,917,408

2,962,256

2,495,277

1,659,516

438,515

2,755,904

2,432,258

842,619
2010

2011

2012

2013

2014

2015

All figures are based on calendar year (e.g. 1 January - 31 December).

Deadlines approach for National Commitments
National Commitments are initiatives set up to define and pursue
sustainable palm oil goals at a country level. They are establishedindependently of the RSPO and are led by industry players,
governments or both.
December 2015 was the deadline for achieving 100% CSPO for several
European National Commitments. According to data collected by the
RSPO, Germany, France, the Netherlands and the UK have all madesignificant progress towards reaching their targets (see page 48 forfurther information). It should be noted that National Commitments
hold varying market shares, and may cover more than food or retailsectors.
The RSPO has publicly pledged and is fully committed to help build
a 100% CSPO European market by 2020. We support all National

Commitments by acting as a platform for sharing knowledge on
membership and market performance data, announcing commitments
via the RSPO Annual Communications of Progress, as well as
campaigning on key sustainability issues.
The RSPO publishes data and progress updates on national
commitments at rspo.org/certification/national-commitments
Driving regional targets with an expanded market outreachWe have continued to tailor RSPO outreach activities based on CSPO
uptake targets for each region. By 2020, Europe is targeted to reach
100% CSPO, Malaysia and Indonesia 50% CSPO, India 30% CSPO andChina 10% CSPO. To facilitate focus and provide assistance in key
regions, RSPO has set up additional offices in China and Latin America
and now has representatives in India, Thailand and the USA.

RSPO IMPACT REPORT 2016

47

IMPACT ON PROFITS & RSPO OUTREACH

ACHIEVEMENTS

REGION

Increased commitment to source 100% sustainable palm oil by 2020:• Amsterdam Declaration supporting a Fully Sustainable Palm Oil Supply Chain by 2020 signed by UK, the Netherlands,
Germany, France, Denmark and Norway at a summit convened by the Dutch Government in December 2015. Morecountries are expected to join soon.

More policies focused on palm oil sustainability:• A feasibility study of policies to end “imported deforestation” caused by commodities including palm oil was
launched by the European Commission in early 2016.
• The European Parliament is working on a non-binding motion for a resolution on sustainable palm oil.
• The environmental and social impacts of unsustainable palm oil production have been discussed in the German
Federal and Italian Parliaments.

Transformation of the food and retail sector in key markets:

EUROPEThe third biggest
palm oil market
and home to someof the world’s
biggest brands
and companies,
Europe is a key
strategic region
for driving global
transformation.

• Food industries in the Netherlands and Germany achieved 84% and 79% RSPO certification respectively.
• French Alliance members achieved 96% of the target to use 100% CSPO by December 2015.11• Leading retailers in the UK achieved the target to source 100% CSPO at the close of 2015.12• Norway, Sweden, Denmark and Italy have established industry commitments on CSPO.

Annual RSPO European Roundtable conference:• Conferences in Berlin (2013), London (2014), Amsterdam (2015) and Milan (2016) have been highly successful,gathering several hundred representatives from the industry, NGOs, academia, local governments and governmentsfrom palm oil-producing countries.

A new communication strategy for Europe:• The Palm Oil Debate was launched on The Guardian newspaper website in 2014 in partnership with Guardian
Sustainable Business. The page drives consumer awareness on the impact of conventional palm oil production andenhances the credibility of CSPO. It receives on average 28,000 unique visitors from up to 50 countries every month.
• The interactive “From rainforest to your cupboard: the real story of palm oil”, one of the Palm Oil Debate’s mostsuccessful features, has been viewed by hundreds of thousands of people.

A more positive public profile for RSPO in Italy:• The RSPO succeeded in raising awareness about CSPO and disentangling a discussion about CSPO from the nutritional
debate through proactive media and stakeholder engagement.

CHALLENGES & NEXT STEPSOur next challenges are to engage industry sectors that are not yet working towards 100% CSPO and to encouragecompanies to shift from GreenPalm certificates (Book & Claim) to 100% physical palm oil (Mass Balance, Segregatedor Identity Preserved).
To tackle these challenges in 2016–2017, the RSPO will prioritise four work streams:
1. Engaging with stakeholders in new markets (e.g. Spain and Poland) and new industry sectors (e.g. animal feed) toincrease CSPO uptake.
2. Promoting RSPO NEXT among RSPO members and potential members in Europe.
3. Encouraging more countries to sign the Amsterdam Declaration, working with the European Commission andParliament on the palm oil and deforestation resolution, and engaging policymakers in other countries where palm
oil is high on the agenda.
4. Reaching broader audiences by educating mainstream media on the complex issues surrounding palm oil production (e.g.
the RSPO organised a visit to a sustainable palm oil plantation in Thailand for European journalists in November 2016).
1112https://www.huiledepalmedurable.org/bilan-2015-perspectives-a-lhorizon-2020
http://www.4-traders.com/news/BRC-British-Retail-Consortium-RETAILERS-LEAD-BY-EXAMPLE-WITH-SUSTAINABLY-SOURCED-PALM-OIL--23088273/

48

RSPO IMPACT REPORT 2016

IMPACT ON PROFITS & RSPO OUTREACH

ACHIEVEMENTS

COUNTRY

First meeting of the RSPO China Steering Committee• First offline meeting hosted by RSPO for members and key players in China in May 2016.

Greener supply chains on the agenda at APEC
• On 29 July 2016, RSPO China delivered a speech at the APEC Annual Conference on Green Supply Chains.

First RSPO China Forum• The first RSPO China Forum took place on 13 July 2016, gathering all palm oil stakeholders in the country together
to promote sustainable palm oil.

‘Say Yes to Sustainable Palm Oil’ campaign launched

CHINA• RSPO China’s first public campaign went live in Beijing and Shanghai in August 2016 as part of a collaboration with
City Shop.

Although thethird largest
importer of palm
oil worldwide,
China’s uptake of
CSPO remains low.
RSPO’s vision is toachieve 10% CSPO
uptake in China by
2020.

Media roundtables on sustainable palm oil• Between May and August 2016, RSPO China conducted 3 media roundtables to engage and educate on palm oil
issues.

A growing RSPO membership• Between August 2014 and August 2016, RSPO memberships in China increased from 28 to 55, while the number ofcertified facilities has increased from 33 to 71.
• Sino-Grain, one of China’s top 3 state-owned palm oil importer and manufacturers, joined the RSPO as a member in
May 2016.

New collaboration with CQM-PCC• A Memorandum of Understanding has been signed between RSPO and CQM-PCC, the leading state-owned certification
body, to jointly enhance RSPO certification in China.

CHALLENGES & NEXT STEPS
Public awareness about palm oil and sustainable palm oil is very low. At the same time, international consumer
goods manufacturers are reluctant to communicate about RSPO to the public in China while Chinese consumer
brands are more concerned about the costs rather than the benefits of buying CSPO. The Government could also
play a more proactive role in palm oil related policy and regulations.
To address these challenges, RSPO China will prioritise the following activities:
1. Conducting a mapping study of the palm oil supply chain in China.
2. Developing case studies of RSPO members in different sectors.
3. Undertaking a consumer survey on palm oil and sustainable palm oil in China.
4. Launching a new public campaign.

RSPO IMPACT REPORT 2016

49

IMPACT ON PROFITS & RSPO OUTREACH

ACHIEVEMENTS

COUNTRY

Substantial rise in members and certifications• As of May 2016, India has 46 RSPO members and 10 companies have attained RSPO supply chain certification
since 2013.
• Many of these companies have multi-plant certifications, taking the total number of certified units to 18 in 2016.

New RSPO representative• RSPO appointed a representative in India in 2015. This has helped establish a local connection and better traction
with local actors.

CHALLENGES & NEXT STEPSINDIAIndia is one of thebiggest palm oil
consumers in theworld, accounting
for more than
9.7 million MT in
2015/2016 alone.
With such a large
market, Indiancompanies havethe potential
to influence
producers towards
better practices
by demanding
CSPO under
RSPO standards
for sustainableproduction.

50

The rise in certifications has not corresponded with an increase in the volume of CSPO demanded or procuredby the market. Analysis by WWF-India indicates that India’s palm oil market is fundamentally different frombrand-focused western markets, and that traditional transformational models based on consumer awareness andbrand pressures do not work. There has been little movement on GreenPalm certificates since 2014 despite theirvery low cost. Companies are also reluctant to pay any premium for CSPO, which means certified suppliers are
struggling to move stocks at prices that would recoup some of the certification and purchasing costs.
The RSPO has set a challenging target of 30% CSPO uptake in India by 2020, and 2017 will be the building phase towards
this target. The two main objectives set by RSPO’s India office will be:
1. Initiating National Interpretations (NIs) of the RSPO P&C.
2. Domestic Certification (RSPO P&C) for palm oil producers in India.
Furthermore, the RSPO will continue to work closely with partners including the WWF and Centre for Responsible
Business in order to drive awareness on sustainable palm oil.

RSPO IMPACT REPORT 2016

IMPACT ON PROFITS & RSPO OUTREACH

ACHIEVEMENTS

COUNTRY

Consumer study and awareness activities:• Our 2015 consumer study revealed very low awareness about all forms of palm oil. However, 27% of respondents said
they would support CSPO-based products.
• In 2015, RSPO became a partner of WWF Indonesia’s consumer campaign #BeliYangBaik to increase consumerawareness and use of sustainable palm oil products.

Certification scheme studies

INDONESIAOver the last
decade, RSPO in
Indonesia has
focused on CSPO
production andimproving grower
performance. Our
focus has now
shifted to include
strengthening ourstrategy towards
consumers andincreasing CSPO
uptake in themarket.

• A joint study by the RSPO and the ISPO Commission was published in February 2016 identifying similarities anddifferences of the two sustainable palm oil certification schemes.

Strengthening grievance systems and accountability• We have continued supporting Indonesian companies to develop their own grievance systems and facilitating morecollaboration between these companies and NGOs.
• A CIFOR report published this year indicates that Indonesia’s RSPO members are more easily held accountable andrespond faster to complaints, even without the intervention of the RSPO.

Assurance on digital data
• Despite growers concern on the legal repercussions of releasing digital data on concession boundaries (mandated in
Resolution 6g of GA10 RSPO in 2013), the Secretariat has been able to collect data on concession boundaries for 42
members in Indonesia.

CHALLENGES & NEXT STEPSThe three key challenges in Indonesia are: the need to educate consumers and drive demand for sustainablepalm oil products; to help that under-represented local stakeholders become fully engaged (especially local civilsocieties, local-indigenous communities, and workers); and to ensure Indonesia’s smallholders gain access to the
CSPO market and are empowered and incentivised to make sustainable palm oil their business.
To address these challenges, RSPO Indonesia will focus on the following key activities:
1. Supporting consumer outreach by engaging buyers in different segments and by driving exposure to the RSPO
trademark. For the next 12 months, RSPO in Indonesia will target groups of young and urban-female consumers, anddevelop constructive messaging towards these groups.
2. Increase RSPO’s access in reaching workers and labour groups, women, local communities and indigenous peoples
through intermediary organisations at national, regional and local levels.
3. Providing continuous support to all initiatives and stakeholders targeting increased certification among smallholders(including harmonisation of the generic standard of Group Certification for FFB production with the endorsed National
Interpretation).
4. Conducting studies to strengthen the implementation of RSPO P&C, including a legal review of existing regulations,and CSPO uptake studies that analyse market structure and economic, social and environmental impact.
5. Working to build capacity to prevent and handle complaints more effectively.

RSPO IMPACT REPORT 2016

51

IMPACT ON PROFITS & RSPO OUTREACH

ACHIEVEMENTS
Malaysia, Singapore, Thailand & Myanmar

COUNTRY

The RSPO’s focus in these important markets remains on driving engagement and building relationships with key
stakeholder groups, including governments, NGOs, industry bodies and consumers.

Malaysia: Enhancing government relations• RSPO is working in partnership with PEMANDU (Performance Management Delivery Unit), a division of the Prime
Minister’s office, which is pursuing the idea of dual certification (i.e. both RSPO and Malaysian Sustainable Palm Oil).
• PEMANDU is also working with RSPO and the Malaysian Palm Oil Board (MPOB) on a project to have 75,000
smallholders in Peninsular Malaysia certified for both RPSO and Malaysian Sustainable Palm Oil (MSPO).

Singapore: Engaging opinion leaders

MALAYSIASINGAPORE• RSPO in Singapore is developing ties with key influencers of consumer markets and policies, including the Singapore
Environment Council (SEC). Activities have included organising supply chain workshops for Unilever.

Thailand: Reaching out to industry associations• RSPO Thailand has established contact with the Thai Palm Oil Board and other industry-related associations.

THAILAND

Myanmar: Securing support from government and potential new members

MYANMAR• RSPO is engaging with the Myanmar government over its intention to further develop the oil palm industry in southern
regions. RSPO has participated in a workshop organised by Flora & Fauna International (FFI), followed by engagementwith key government officials and representatives of existing oil palm plantation companies.

CHALLENGES & NEXT STEPSCombatting haze, engaging governments and educating consumers about CSPO are the key challenges for RSPOin Malaysia, Singapore, Thailand and Myanmar.
These RSPO offices are undertaking a number of activities in response, including:
1. RSPO in Singapore is engaging with and acting as advisor to PM Haze, an NGO working with the WWF and theSingapore Institute of International Affairs (SIIA) on a consumer campaign called #XtheHaze.
2. RSPO in Malaysia is building ties with local NGOs that have traction with local consumers, for example MENGO(Malaysian Environmental NGOs), whose members and spokespeople include public figures that are raisingawareness and building public support for RSPO and CSPO.

52

RSPO IMPACT REPORT 2016

IMPACT ON PROFITS & RSPO OUTREACH

ACHIEVEMENTS

COUNTRY

First dedicated US representative appointed• Strengthening the RSPO’s presence in the USA, we appointed a New York City-based representative in July 2016.
The role will involve the coordination of RSPO outreach activities as well as stakeholder engagement on key issues
related to sustainability in the palm oil supply chain.

CHALLENGES & NEXT STEPSUNITED STATESOF AMERICACANADA
With morethan 200 RSPO
members, aswell as many
headquartersfrom which
multinational
corporations directsourcing policies
for their worldwide
operations,North America is
becoming a key
focus market for
the RSPO.

Our new US representative faces two key challenges: misconceptions about palm oil and a general lack ofawareness about the RSPO and its broader aims.
Key activities for addressing these issues will include:• Driving awareness of the RSPO by supporting existing RSPO membership, recruiting new members, and educating
key stakeholders from the business community, government and civil society.
• Reaching out and engaging US consumers, manufacturers, retailers and media on what palm oil is, why CSPO isimportant, the differences between sustainably sourced and conventionally sourced palm oil, and the benefits of afully certified supply chain.

RSPO IMPACT REPORT 2016

53

IMPACT ON PROFITS & RSPO OUTREACHRSPO Trademark

As at 30 June 2016:

The RSPO trademark is a globally recognised sustainability label thatsignals the use of RSPO-certified sustainable palm oil in the production ofa product. Its purpose is to create awareness and support ethical decision
making among consumers.

•••

In June 2016, the RSPO launched a new crowd-sourced mobile phone
application called the RSPO Trademark App, which allows consumers
wherever they are in the world to find, shop and upload RSPO certified
products bearing the RSPO Trademark.

•412 companies hold a trademark license, 112 more than in the lastreporting period.
Germany, France and the UK are the top 3 countries for trademark
licenses.
Total licenses have increased steadily since 2011, with the highest
number issued in 2015.
The number of licenses issued in the first half of 2016 is only justshort of the 2015 annual total13.

By country, Italy saw the greatest increase in trademark licensing, from 3
in the last reporting period to 27, while Spain's increased from 3 to 19. This
places Italy 6th and Spain 9th in the top ten list of most licensed countries,
pushing out Australia (8th in 2014) and Indonesia (10th in 2014).

As of September 2015, all new members receive a trademark license,
provided that they return a signed a license agreement to the RSPO. To
use the RSPO trademark on a product, members must also be supply
chain certified. The data presented here is representative of supply chain
certified member licenses only.

The significant increase of licenses in 2015 is largely explained by the
aforementioned change in the license issuing process that occurred during
the reporting period. Therefore, the large growth in trademark licenses in2015 does not necessarily reflect a significant increase in RSPO labelled
products in the market.

TRADEMARK LICENSE BY COUNTRY(As at 30 June 2016)

94

68

42

39

35

32

27

25

20

19

r
Oth
e

nd
Po
la

ain
Sp

tes
ed

Sta

ia
ys

Un
it

Ma
la

ly
Ita

lgi
um

erl
an
eth

Be

ds

m
eN
Th

Kin
g

do

ce
Un
it

ed

Fra
n

Ge

rm
an

y

11

Photo credit: RSPO
13

54

Trademark license data is based on calendar year (e.g. 1 January – 31 December).

RSPO IMPACT REPORT 2016

IMPACT ON PROFITS & RSPO OUTREACH

SDG Actions

SDG Opportunities

The RSPO supports
the SDGs

The RSPO supports
the SDGs

Goal 12: Responsible consumption and production

Goal 17: Partnerships for the goals

Ensure sustainable consumption and production patterns.

Strengthen the means of implementation and revitalise the global
partnership for sustainable development.

We offer guidelines for sustainable palm oil production through the P&C. We
also drive consumer, government and industry awareness about sustainablepalm oil. We support national initiatives by acting as a platform for knowledge
sharing, and, through our regional offices, we increasingly engage with
policymakers and industry leaders on regional targets for CSPO uptake.

There is a significant opportunity to strengthen our position as a multistakeholder initiative and leverage our network in order to facilitate all-party
collaboration towards real transformation in the palm oil industry.

#GOODBADPALMOIL – DRIVING CONSUMERS AWARENESS
Consumer choice plays a vital role in making sustainable palm oil the norm. But many people are unaware that the palm oil contained in the
products they buy can be produced in more – or less – sustainable ways. Supported by bloggers in the US and Europe, we ran a social media
campaign throughout May 2016 to highlight the difference between 'good' and 'bad' palm oil.
The campaign, which combined art and videos, went viral on #GoodBadPalmOil. Over 2 million impressions of content were delivered and thevideo received 339,000 views. While 55% of site traffic was from the USA – the target market – it was also popular among UK and Australianvisitors, many of which were likely drawn by the numerous blogs reporting on the campaign.
Building on this momentum, we will continue running the campaign in the US and expand its reach to cover urban centres in Australia and the UK.
We also plan to tailor the campaign to urban centres in other markets, potentially in India or China.

RSPO IMPACT REPORT 2016

55

IMPACT ON PROFITS & RSPO OUTREACHNEW STUDY:
MAKING THE CONNECTION BETWEENSUSTAINABILITY AND PROFIT
When palm oil companies began certifying their plantations in 2008,
many anticipated large profits generated from the premium attached
to CSPO sales. This assumption was based on the value of GreenPalm
certificates traded under the B&C system, which decreased between
2010 and 2015. Many companies used this as the only indicator of
financial benefit – without considering other indicators, such asincreased yields due to better practices and lower costs throughmanagement and resource efficiencies – and therefore do not
associate RSPO certification with profitability.
To tackle this perception, the RSPO undertook a study14 examining
two types of indicators for profitability: financial indicators, such as
FFB price or CPO price, and operational indicators, such as improved
yields, greater extraction rate and greater efficiency. The objective wasto identify which other indicators of profitability best correlate withsustainability, with sustainability being measured as the proportionof a company's plantations under RSPO certification. The study was
carried out for palm oil produced in certified plantations in Malaysia
and Indonesia in 2013 and 2014.
Data was collected from 34 palm oil growers using a combinationof annual reports, questionnaires and face-to-face interviews. The
surveyed group consisted of both RSPO members and non-members.
The study found:
•

•

•

•

•

14

56

Average CPO selling price is the best indicator correlating
profit and sustainability: transition from a lower to a higher
selling price occurs between 20% and 40% certification.
More certified plantation = more profitability: In 2014, theaverage CPO selling price for growers with over 40% RSPO
certified plantations was higher than for growers with lessthan 20% certified plantations (a statistically significant
difference of RM 158/MT).
More certified plantation = more productivity: FFB yield, oil
extraction rate and net CPO yield per area were significantly
higher for companies with more than 40% of their plantations
certified (1.28 MT/ha or 35%) than companies with less than
20% certified.
More certified plantation = higher revenue: companies withless than 20% of their plantations certified had an averagerevenue of RM 8,400/ha, while growers with more than 40%
of RSPO certified growing areas had an average revenue of RM
12,100/ha (a statistically significant increase of 45%).
This relationship appears to be independent of other factors:
no similar correlation was observed between average CPO price
and: (1) the size of a company’s downstream activities, (2) the
overall land bank size or (3) the area of mature plantations.

“…Every Ringgit invested in complying
with RSPO-based sustainability
generated, on average, an additional
RM 150 in CPO revenue in 2014”

Photo credit: RSPO & Jonathan Perugia

Lessons & challenges
Challenging negative consumer perceptions
Consumer perceptions of palm oil are increasingly negative due toa growing awareness of the devastating environmental and social
impacts that can result from its production. Some countries haveboycotted palm oil altogether, causing major brands to exclude it
from their sourcing. Yet, awareness about sustainable palm oil andthe benefits that could be gained by transforming the industry remains
very low. This is why we are working to re-balance the conversation,
educating consumers about sustainable palm oil and our vision formaking it the norm.
Leading in partnership
Our ability to transform the palm oil sector will depend on the
involvement and commitment of all actors that have a stake in its
sustainable future. One of our next key challenges will be to ramp up
efforts to drive collaboration between governments, the private sector
and other key players as we work towards regional targets – then our
global target – of 100% CSPO.
Realising the big potential of smallholders
Convincing smallholders that sustainable palm oil is good for businesscould be a tipping point in the transformation to a 100% CSPO
market, but many challenges stand in our way. The sheer number ofsmallholders makes traceability extremely difficult at present. Tools,
agricultural best practices and technical training tailored to the needsof small farmers are also in short supply. Furthermore, the direct
cost of certification could actually disadvantage smallholders if theycannot achieve equal access to new markets.

Correlating Economic and Financial Viability with Sustainability for Palm Oil Plantations was conducted in 2015 by Dr. Steffen Preusser, and wascommissioned by the RSPO.

RSPO IMPACT REPORT 2016

MEASURING OUR IMPACT/ PERSPECTIVES

IKEA
Purchasing
Tomas Lundin,
Category Area
Sustainability Manager

Photo credit: RSPO & Jonathan Perugia

IKEA is a major global retailer infurniture and home living. IKEA has
a well-established sustainability
strategy - People and Planet Positive- and sees significant overlap
between its own objectives and the
UN Sustainable Development Goals.
IKEA is committed to ensuring thatthe palm oil used in its products
is grown and processed in a
responsible and sustainable way.

IKEA fully supports the RSPO, and we believe thatthe standard is currently the best tool available toachieve change in the palm oil sector. IKEA does
not source palm oil directly, so we work closelywith our suppliers to make sure the palm oil
used in our products is sourced according to ourrequirements. Although we are a relatively small
industry user, we are committed to working withRSPO certification.
However, the challenges with palm oil remain
immense. Deforestation, peatland development,
and human rights issues are urgent concerns thatare not covered to the necessary extent at present.
This is why IKEA’s Position on Palm Oil, released
in 2014, included additional requirements for
suppliers to go beyond RSPO certification,
ensuring no deforestation and no planting on peat.

Another challenge is that, sometimes, certification
schemes and industry requirements, can risk
excluding smallholders. This is something that
we want to avoid. We therefore welcome that
the RSPO is taking extra steps to develop acomprehensive smallholder strategy, in addition
to RSPO NEXT.
Within the next two years, we hope to see the
RSPO further improving its chain of custodyrequirements. For IKEA, being able to verify as far
down the chain as needed is crucial, and we try to
do this for all our materials. We need to be able
to say we are doing everything we can to verify our
supply (beyond desktop verification). For palm oil,this means going all the way to mill or plantationlevel.

RSPO IMPACT REPORT 2016

57

BASE DATA AND NOTESUnless otherwise specified, all figures and results presented in the body of the report are based on data extracted from the RSPO’s official reporting period: 1 July
2015 – 30 June 2016. This timeframe does not apply to data from other sources (e.g. independent research studies commissioned by the RSPO), which may havea calendar year basis (e.g. 1 January 2015 – 31 December 2015). Figures presented in the Base Data tables below may also differ from figures presented in the
body of the report, as the majority of the data presented for 2012-2015 have been updated to ensure they are inclusive up to 31 December 2015.
Indicator

Breakdown

Unit

2016

2015

2014

2013

2012

Number ofMembers

2,941

2,282

1,631

1,178

838

United Kingdom

378

330

200

131

106

Germany

372

279

208

147

97

Netherlands

191

146

119

92

69

Malaysia

128

109

117

95

87

115

103

109

88

70

143

127

106

86

73

200

138

89

70

46

Belgium

106

89

62

44

24

Australia

114

80

53

0

0

Italy

158

113

52

29

0

Others

1,036

768

516

396

266

1,373

1,151

991

829

695

1,458

1,032

540

309

142

110

99

100

103

104

Membership
Total
By Country

Indonesia
FranceUnited States

By Membership Type

Ordinary
Associate
Affiliate

Number ofMembers

Number ofMembers

Certified, production, uptake
Area

Annual Production Capacity
SupplySales

UptakeProduction AreaHa

2,187,784

2,773,999*

2,633,583*

1,978,110

1,526,273

Certified AreaHa

2,830,355

3,463,598*

3,159,277*

2,653,058

2,105,433

HCV AreaHa

157,115

144,967

NA

NA

NA

CSPO

MT

10,850,196

12,886,070

11,955,234*

9,792,185*

8,184,200

CSPK

MT

2,444,103

2,996,574

2,713,935*

2,244,312*

1,896,702

CSPO

MT

6,259,831

12,130,775

10,998,913*

8,735,843*

6,724,236

CSPK

MT

1,440,480

2,780,291

2,531,369*

2,030,746

1,570,070

CSPO Sales
through SG,MB, IP

MT

1,894,181

2,755,904

2,432,258

1,551,017

984,138CSPO Sales through B&C

MT

964,0443,426,790

2,917,408*

2,962,256

2,495,277

Total CSPO SalesMT

2,858,225

6,182,694

5,349,666

4,513,273

3,479,415

CSPO Sales/ Supply

MT

45.7%

51%

48.6%*

51.7%

51.7%

Notes to data:• Membership data for 2012-2016 is based on RSPO’s official reporting period (i.e. taken as at 30 June of each respective year).
• All 2016 data presented under “Certified, production, uptake” are inclusive up to 30 June 2016. All 2012-2015 data presented under “Certified, production, uptake” are inclusive
up to 31 December 2015.
• All figures presented under “Certified, production, uptake” are inclusive of schemed and independent smallholders certified under group certification schemes.
• Figures marked with an asterisk have been updated for the 2016 report to be inclusive up to 31 December 2015, and may therefore differ from corresponding figures presented
in the RSPO Impact Update Report 2015.

58

RSPO IMPACT REPORT 2016

BASE DATA AND NOTES

Indicator

Breakdown

Unit

2016

2015

2014

2013

2012

IndonesiaHa

34,609332,372

828,470

NA

NA

LiberiaHa-

48,47098,485NA

NA

CameroonHa--69,975NANA

Papua New Guinea

Ha

2,591

-

67,179NA

NA

Malaysia

Ha

2,823

3,558

-

NA

NA

Gabon

Ha

-

23,78051,178NA

NA

CambodiaHa--

10,719NA

NA

Nigeria

Ha

-

-

5,594

NA

NA

Costa Rica

Ha

-

-

4,145

NA

NA

Ghana

Ha

-

2,240

3,715

NA

NA

Brazil

Ha

-

7,448

1,223

NA

NA

New Planting Procedures
NPP area (by country)

Note to data:

All 2016 figures presented for NPP area are inclusive up to 30 June 2016. All 2012-2015 figures are inclusive up to 31 December 2015.

Indicator

Breakdown

Unit

2016

2015

2014

2013

2012

Number ofLicenses

412

300

181

NA

NA

175

128

79

NA

NA

86

77

51

NA

NA

135

77

36

NA

NA

Retailers

7

9

9

NA

NA

Growers

9

7

6

NA

NA

TrademarkTotal Trademark
By Stakeholder Groups

Consumer Goods
Manufacturers
Processors & Traders
Supply Chain Associates

Number ofLicenses

RSPO IMPACT REPORT 2016

59

BASE DATA AND NOTES

Indicator

Breakdown

Unit

2016

2015

2014

2013

2012

Germany

68

54

40

NA

NA

France

42

27

20

NA

NA

United Kingdom

39

24

17

NA

NA

The Netherlands

35

24

15

NA

NA

32

22

11

NA

NA

27

-

-

NA

NA

25

28

21

NA

NA

United States

20

24

16

NA

NA

Spain

19

-

-

NA

NA

Poland

11

14

5

NA

NA

Others

94

58

27

NA

NA

89

111

98

51

29

Trademark
By Country

Belgium
Italy
Malaysia

By YearNumber ofLicenses

Number ofLicensesComplaints
Complaints Success Criteria

Note to data:

60

Complaints resolved/
closed

% age

10%

39.3%

40%

36.1%

28%

Average time to close acomplaint

Days

312

685

604

414

455

Actions plans or remedial
works undertaken

NA

NA

NA

12

6

Members suspended
or voluntarily withdrew
after complaint verified

1

1

2

1

2

Trademark license and Complaints data for 2012-2015 is based on calendar year (1 January 2015 – 31 December 2015). Data presented for 2016 is taken as at
30 June 2016.

RSPO IMPACT REPORT 2016

BASE DATA AND NOTES

Indicator

Total Certified
Area

Total
Production
Area

Total
CSPO

Total
CSPK

Total
FFB

Produced

CSPO Supply(monthly)

Mills and Supply Base(s)2,818,475

2,176,606

10,805,245

2,433,170

47,817,141

900,437

202,764

Group Certification for
Smallholders (SHG)

11,88011,17844,951

10,933

237,630

3,746

911

P&C certification

Note to data:

All figures in the above table are taken as at 30 June 2016.

Indicator

Total
Certified
Area

Total
Production
Area

Total
CSPO

Total
CSPK

Total
FFB

Produced

CSPO
Supply(monthly)

129,234

48,855

180,891

37,564

968,881

15,074

3,130Countries with P&C certification
BrazilCambodia

24,831

11,811

25,861

5,914

137,850

2,155

493

Colombia

39,56528,391

110,216

21,655546,264

9,185

1,805

Costa Rica

47,65843,192

170,668

38,678737,198

14,222

3,223

Ghana

20,826

11,25630,6696,874

137,478

2,556

573

Guatemala

20,83518,892

107,252

10,778539,583

8,938

898

Honduras

20,888

20,11376,053

17,109340,006

6,338

1,426

Indonesia

1,545,269

1,228,653

6,414,232

1,433,143

27,495,123

534,519

119,429

Côte d’Ivoire

9,323

9,323

4,486

1,090

66,130374

91Madagascar

2,234

1,087

860

497

4,233

72

41

Malaysia

754,812593,691

2,957,976

683,723

13,710,465

246,498

56,977

Papua New Guinea

181,736

141,720

661,837

159,4442,819,455

55,153

13,287

Soloman Islands

8,361

7,311

35,0007,900

151,983

2,917

658

Thailand

12,903

12,311

29,245

8,801

162,492

2,437

733

Note to data:

All figures in the above table exclude data for independent smallholders certified under group certification, but are inclusive of schemed smallholders certified
under group certification. All figures are taken as at 30 June 2016.

RSPO IMPACT REPORT 2016

61

GLOSSARY
Accreditation Services International (ASI):		

One of the world’s leading accreditation bodies for sustainability standards systems, including
the RSPO. Founded in 2006, ASI is a full member of the ISEAL Alliance

Annual Communication of Progress (ACOP):		
		

Reports submitted by RSPO members to gauge their progress towards 100% RSPOcertified sustainable palm oil. These reports are mandatory for Ordinary and Affiliate
members, and are submitted each year

Best Management Practice (BMP)

Practical guidelines to enhance oil palm management:

Book and Claim (B&C):
		

The book and claim system allows for the transfer of RSPO certified oil palm throughtradable certificates to actors in the palm oil supply chain

Certification Body (CB):		Organisation that provides third party auditing and certification services related toa product, process or system, and which can issue a certificate of compliance

Certified Sustainable Palm Oil (CSPO):		Palm oil that has been grown on a plantation that has been managed and certified inaccordance with the RSPO Principles & Criteria

Crude palm oil (CPO)

A type of unrefined vegetable oil obtained from the fruit of the oil palm tree:

Dispute Settlement Facility (DSF)
:
		
		
		
		

RSPO in-house mediation service that facilitates the sharing of information,
contacts, know-how and experiences relevant to palm oil production dispute cases(where at least one party is an RSPO member). The DSF also supports and facilitatescommunities and other stakeholders to use mediation as an effective means toresolve disputes

Free, prior and informed consent (FPIC):		

A principle that a community has the right to give or withhold its consent to proposed
projects that may affect the lands they customarily own, occupy or otherwise use

Fresh Fruit Bunch (FFB):		

Bunch harvested from the oil palm tree. Each bunch can weigh from 5 to 50
kilogrammes and can contain 1,500 or more individual fruits

HCS Convergence Process
:
		
		
		
		

An agreement process between the governing bodies of two methodologies, theHCS+ Science Study and the High Carbon Stock Approach, which concluded in November
2016. The process aimed to achieve agreement on one single, coherent set ofprinciples for implementation of companies’ commitments to “no deforestation” intheir palm oil operations and supply chains

HCV Assessor Licensing Scheme (ALS)
:
		
		
		
		

A process created by the HCV Resource Network aimed to improve the consistency
and quality of High Conservation Value (HCV) assessments and assessment reports.
The scheme issues licences to lead HCV assessors with relevant qualifications andexperience, provides for an HCV Assessment Manual and reporting templates, andevaluates the HCV assessment reports produced by licensed assessors

Hectares

A unit of measurement equivalent to 10,000 square metres, or 100m x 100m:

High Carbon Stock Approach (HCSA):		

A methodology that distinguishes forest areas for protection from degraded lands
with low carbon and biodiversity values that may be developedHigh Conservation Values (HCV)
:
		
		
		

The concept of High Conservation Values Forest (HCVF) was first developed by the
Forest Stewardship Council (FSC) in 1999 as their 9th principle. The FSC defined
HCVF as forests of outstanding and critical importance due to their environmental,socio-economic, cultural, biodiversity and landscape value

62

RSPO IMPACT REPORT 2016

Glossary

Identity Preserved (IP):				The Identity Preserved (IP) supply chain model assures that RSPO certified palm oil is kept
separate from oil that is not RSPO certified. This oil can be physically traced back to its
plantation of origin

Independent Appeals Mechanism (IAM)
:
		
		
		

A procedure that will form a part of the RSPO Complaints System, setting out
the mechanism for receiving, evaluating and resolving appeals. The procedure will
apply exclusively to appeals filed against the outcome of a complaint handled by the
RSPO Complaints Panel

ISEAL Alliance:
Global membership association for credible sustainability standards, who work		
together to improve the impact and effectiveness of current and potential future		members
Jurisdictional Approach:
In this report, the Jurisdictional Approach refers to the certification of palm oil		production implemented at the provincial level using a model of rural development
		that is aimed at reducing deforestation and greenhouse gas emissions while also		 improving the welfare of society and recognising the rights of the indigenous
		communities
Mass balance (MB):				Supply chain model that allows certified claims to be transferred from one oil palm
product to another either through physical blending or administratively understrictly controlled circumstances

Metric Tonne (MT)A unit of mass equivalent to 1,000 kilogrammes:

National Interpretations (NI):				Indicators and guidance adapted from some or all of the criteria in the international
RSPO Principles & Criteria that are applicable at the national level for a number ofcountries that palm oil is produced in

New Planting Procedures (NPP):		

Provides guidance on how and under what conditions new oil palm plantings should
be carried out

Oil palm:				

A species of palm (Elaeis guineensis) and the principal source of palm oil. It is native
to west and southwest Africa, but is now cultivated in over 26 countries. Ideal growing
conditions occur up to 10 degrees either side of the equator

PalmGHG:						

A calculator developed by the RSPO Greenhouse Gas Working Group (2010-2011) and further
refined and improved by the RSPO Emission Reduction Working Group to estimate and monitor
net greenhouse gas emissions from estate and mill operations including GHG emissions fromany land use changes

Palm Kernel Oil (PKO)

Oil extracted from the kernel or core of the palm fruit:

Palm Oil
:
		
		
		
		
		

Edible oil extracted from the fruit of the oil palm. Palm oil is one of the few highly
saturated vegetable fats. It remains semi-solid at room temperature and is suitable
for a wide variety of applications. Palm oil is an ingredient in a large number ofpackaged products found on supermarket shelves, including margarine, baked
goods, chocolate, ice cream, soaps and cosmetics. It is also used as fuel for cars
and power plants

Paraquat:				

The trade name for N,N’-dimethyl- 4,4’-bipyridinium dichloride, the organic
compound with the formula [(C5H4N)2]Cl2. It is one of the most widely usedherbicides, used to destroy green plant tissue on contact

RSPO IMPACT REPORT 201663

Glossary

Peat:

Peat is an accumulation of rotting plant material, forming in wetlands or peatlands

Peatland subsidence:		The lowering of soil surface as a result of peat shrinkage and loss of carbon due to oxidationand erosion

RSPO Complaints Panel

High-level body that handles complaints against RSPO members:

RSPO Principles & Criteria (P&C):
				

Guidelines on how palm oil companies and growers should produce palm oilsustainably. It forms the basis of company assessment for certification and isreviewed every five years

Segregation (SG):		The Segregation (SG) supply chain model assures that RSPO certified oil palm
products delivered to the end user come only from RSPO certified sources

Smallholders

Farmers growing oil palm on a plantation of less than 50 hectares:

United Nations Sustainable Development Goals (SDGs) :
		
		
		
		

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RSPO IMPACT REPORT 2016

A set of 17 aspirational global goals to end poverty, protect the planet andensure that all people enjoy peace and prosperity. The goals build on the
successes of the Millennium Development Goals, while including new areas
such as climate change, economic inequality, innovation, sustainableconsumption, peace and justice, among other priorities

REFERENCES
BBC. (2015, October 26)
What causes South East Asia's haze? BBC. Retrieved from http://www.bbc.com/news/world-asia-34265922
HCV Resource Network. (2016)
The HCV Assessor Licensing Scheme. Retrieved from https://www.hcvnetwork.org/als/
HCV Resource Network. (2016)
The Six HCVs. Retrieved from https://www.hcvnetwork.org/about-hcvf/the-six-high-conservation-values
High Carbon Stock Approach. (n.d.)
The High Carbon Stock Approach. Retrieved from http://highcarbonstock.org/
ISEAL Alliance. (2016)
Impacts Code. Retrieved from http://www.isealalliance.org/our-work/defining-credibility/codes-of-good-practice/impacts-codeMallet, P., Maireles, M., Kennedy, E., & Devisscher M. (2016, April)
ISEAL Report: How sustainability standards can contribute to landscape approaches and zero deforestation commitments. Retrieved from ISEAL Alliance website:
http://www.isealalliance.org/sites/default/files/ISEAL_Standards%20_Contributions_to_Landscape_Approaches_April16_Final.pdf
Preusser, S. (2015)
Correlating Economic and Financial Viability with Sustainability for Palm Oil Plantations. Retrieved from RSPO website: http://www.rspo.org/news-and-events/
announcements/the-correlation-between-economic-and-financial-viability-with-sustainability-for-palm-oil-plantations-study
RSPO. (2016, April)
RSPO Next Guidance Document. Retrieved from http://www.rspo.org/certification/rspo-next
RSPO. (2015)
Impact Update 2015. Retrieved from www.rspo.org/publications/download/f4aad4e0d5fabf
RSPO. (2015, November)
Remediation and Compensation Procedure (RaCP) Related to Land Clearance Without Prior High Conservation Value (HCV) Assessment. Retrieved from http://
www.rspo.org/news-and-events/announcements/update-on-the-endorsement-of-the-rspo-remediation-and-compensation procedures-racp
RSPO. (2015, November)
RSPO New Planting Procedure. Retrieved from http://www.rspo.org/certification/new-planting-procedures
RSPO. (2014)
Roundtable on Sustainable Palm Oil: Impact Report 2014. Retrieved from www.rspo.org/publications/download/44e17dfcbd31e04
RSPO. (2013)
Principles and Criteria for the Production of Sustainable Palm Oil. Retrieved from http://www.rspo.org/key-documents/certification/rspo-principles-and-criteria
RSPO. (n.d.)
Smallholders Hub. Retrieved from http://www.rspo.org/smallholders
RSPO. (n.d.)Sustainable Palm Oil. Retrieved from http://www.rspo.org/about/sustainable-palm-oil
RSPO. (n.d.)
The Palm Oil Debate. Retrieved from http://www.rspo.org/about/palm-oil-debate

RSPO IMPACT REPORT 2016

65

REFERENCES

RSPO. (n.d.)#GoodBadPalmOil. Retrieved from http://www.rspo.org/about/goodbadpalmoil
Sidique, S.F., Sheng, T.Y., Djama, M., Rizal, C.K.M., Sadili, D.S., & Zainalabidin, S.M. (2015)
The Impacts of RSPO on the Livelihood of Smallholders: Case Studies in East Malaysia. Kuala Lumpur, Malaysia: RSPO and Institute of Agricultural and Food
Policy Studies (IKDPM).
Sustainable Palm Oil Transparency Toolkit. (n.d.)Companies scorecard and interactive map. Retrieved from http://www.sustainablepalmoil.org/companies/#scores
The Royal Society. (2015)
SEnSOR Programme Research. Retrieved from http://www.sensorproject.net/sensor-programme-research/
United Nations. (2016)
Sustainable Development Goals. Sustainable Development Knowledge Platform. Retrieved from https://sustainabledevelopment.un.org/sdgs
United Nations. (2016)[Sustainable Development Goal Icons]. Retrieved from http://www.un.org/sustainabledevelopment/news/communications-material/
Wetlands International. (n.d.)
Flooding of lowland peatlands in Southeast Asia [Factsheet]. Retrieved from https://www.wetlands.org/publications/flooding-of-lowland-peatlands-insoutheast-asia/
World Health Organization. (2010)
The WHO Recommended Classification of Pesticides by Hazard and Guidelines to Classification 2009.
Retrieved from http://www.who.int/ipcs/publications/pesticides_hazard/en/
World Resources Institute. (2016)
Global Forest Watch Interactive Map. Retrieved from http://www.globalforestwatch.org/

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CONTACT RSPO
We value the feedback of our stakeholders.
If you have questions about this report or our impact, please contact:
Impacts and Evaluation Division
Roundtable on Sustainable Palm Oil (RSPO) Secretariat
Unit A-37-1, Menara UOA Bangsar
No.5 Jalan Bangsar Utama 1
59000 Kuala Lumpur
T: +6 03 2302 1500

E: rspo@rspo.org

www.rspo.org

Impacts and Evaluation Division